FG Inaugurates Committee to Draft 2026 VAT Modification Order
The Federal Government has inaugurated an Inter-Ministerial Committee to develop the 2026 Value Added Tax (VAT) Modification Order as part of efforts to ensure the effective implementation of Nigeria’s new tax laws and provide greater clarity for businesses, investors and tax administrators.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, inaugurated the committee on Friday in Abuja, describing the assignment as a critical step toward building a modern and practical VAT framework that aligns with the objectives of the Tax Reform Acts.
According to the Minister, the Tax Reform Acts, which took effect on January 1, 2026, represent the most significant overhaul of Nigeria’s tax system in decades. He said the reforms are designed to simplify tax administration, improve certainty, enhance competitiveness, protect vulnerable Nigerians and support sustainable economic growth.
Oyedele explained that while the previous VAT Modification Order served its purpose under the repealed VAT Act, the new legal framework requires a fresh Order to provide clarity, update relevant schedules and facilitate the implementation of the Nigeria Tax Act.
He stressed that the new VAT Modification Order should not merely replicate the old document but should provide clear and practical guidance that reflects the realities of Nigeria’s evolving economy.
The Minister directed the committee to review the legal framework, administrative practices and policy directives governing VAT administration, particularly the VAT-exempt and zero-rated provisions contained in Part IV of the Nigeria Tax Act, 2025. He urged members to identify areas requiring clarification and recommend practical solutions.
He also instructed the committee to engage widely with stakeholders, including government institutions, the organised private sector, professional bodies and other interest groups, to validate classifications, resolve implementation concerns and ensure balanced recommendations.
The committee is expected to recommend a comprehensive schedule of VAT-exempt and zero-rated supplies, taking into account revenue implications, social impact, Nigeria’s treaty obligations and regional integration commitments.
In addition, members are to prepare a clear and implementable VAT Modification Order consistent with the provisions of the Nigeria Tax Act and propose amendments to the Tax Reform Acts and other relevant laws where necessary to strengthen implementation.
Oyedele emphasized that the committee’s recommendations should support industrial growth, investment, exports, food security, innovation and Nigeria’s energy transition while preserving the integrity of the VAT system.
He also called for reduced ambiguity in VAT administration to improve compliance, strengthen investor confidence and make tax administration more efficient.
The Minister encouraged the committee to draw from international best practices while ensuring that the final framework reflects Nigeria’s unique economic realities and development priorities.
The committee has been given six weeks to submit a draft VAT Modification Order, schedules of VAT-exempt and zero-rated supplies with corresponding Harmonised System Codes, implementation notes, a stakeholder consultation report and recommendations for any necessary legislative amendments.
The committee comprises 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, the Tax Advisory Committee and the Tax Justice and Governance Platform.
Expressing confidence in the committee’s expertise, Oyedele said its blend of public and private sector experience would ensure the development of a technically sound and practical VAT framework capable of supporting the effective administration of Nigeria’s tax system.
He noted that the committee’s work would play a vital role in improving the ease of doing business, strengthening investor confidence and advancing the Federal Government’s fiscal reform agenda, while formally inaugurating the committee and wishing members success in carrying out their assignment.
