Finance Minister Oyedele Sets Up Committee to Draft New VAT Order Under Tax Reforms

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has inaugurated an inter-ministerial committee to develop Nigeria's 2026 Value Added Tax (VAT) Modification Order, describing the exercise as a critical step in implementing the country's sweeping tax reforms.

The committee, inaugurated in Abuja on Friday, has been tasked with producing a new VAT framework aligned with the Nigeria Tax Act, 2025, which came into effect on January 1, 2026.

According to a statement issued by the Federal Ministry of Finance, the committee will review existing VAT policies and recommend a new Modification Order that provides greater certainty for businesses, investors and tax administrators while strengthening implementation of Nigeria's reformed tax regime.

Oyedele said the exercise would provide greater certainty for businesses, investors and tax administrators while supporting the effective implementation of the recently enacted Tax Reform Acts.

"This is not about reproducing an old document. It is about developing a VAT Modification Order that is clear, practical and responsive to the needs of a changing economy," he said.

He described the tax reforms as the most comprehensive restructuring of Nigeria's tax system in decades, noting that they were designed to simplify tax administration, improve compliance, enhance Nigeria's competitiveness, protect vulnerable citizens and strengthen the country's long-term economic growth.

According to him, the previous VAT Modification Order, which was issued under the repealed Value Added Tax Act, has become obsolete following the enactment of the Nigeria Tax Act, making a replacement necessary.

"The new Order should eliminate ambiguity, simplify compliance for taxpayers, support investment decisions and provide tax administrators with clearer guidance for implementing the law," Oyedele added.

The committee will be chaired by the Permanent Secretary of the Federal Ministry of Finance, Raymond Omachi and has been directed to undertake a comprehensive review of the legal, administrative and policy framework governing VAT administration.

Particular attention will be given to the VAT-exempt and zero-rated provisions contained in Part IV of the Nigeria Tax Act, 2025, with members expected to identify areas requiring further clarification and recommend practical implementation measures.

Oyedele instructed the committee to engage widely with stakeholders, including government agencies, the organised private sector, manufacturers, professional bodies and other interest groups, to validate classifications and resolve implementation concerns before submitting its recommendations.

The committee has also been mandated to recommend a comprehensive schedule of VAT-exempt and zero-rated goods and services, taking into account revenue implications, social impact, Nigeria's international treaty obligations and regional integration commitments.

In addition to drafting the new VAT Modification Order, members are expected to prepare implementation guidelines and recommend amendments to existing tax legislation where necessary to improve the effectiveness of the reforms.

Oyedele stressed that the recommendations should remain faithful to both the letter and spirit of the new tax laws while supporting industrialisation, investment, exports, food security, innovation and Nigeria's transition to cleaner energy.

"Nigerians cannot wait. Businesses need certainty. Investors need confidence. Government needs a VAT system that is easy to administer and supports growth. I urge you to approach this assignment with diligence, objectivity and a sense of urgency," he said.

The committee has been given six weeks to complete its assignment and submit a draft VAT Modification Order, schedules of VAT-exempt and zero-rated supplies with their corresponding Harmonised System (HS) Codes, implementation notes, a stakeholder consultation report and recommendations on any legislative amendments considered necessary.

Its membership includes representatives of the Federal Ministry of Finance, the Nigeria Revenue Service, the Nigeria Customs Service, the Federal Ministry of Industry, Trade and Investment, the Joint Revenue Board, the Manufacturers Association of Nigeria (MAN), the Tax Advisory Committee and the Tax Justice and Governance Platform.

Background

The inauguration marks another phase in the Federal Government's implementation of Nigeria's far-reaching tax reforms, which consolidated several tax laws and introduced new administrative structures aimed at improving revenue collection while making the tax system simpler and more predictable.

VAT remains one of Nigeria's largest sources of non-oil revenue, making clarity around exemptions, zero-rated supplies and compliance procedures critical for manufacturers, importers, exporters, service providers and consumers. The proposed VAT Modification Order is expected to provide the operational framework that tax authorities and businesses will use in administering the new VAT regime under the Nigeria Tax Act, 2025.