The federal government has begun an overhaul of the framework governing value-added tax administration, setting up a committee to draft a new VAT Modification Order that will align implementation with the country’s sweeping tax reforms, reduce uncertainty for businesses and investors, and improve compliance under the Nigeria Tax Act.
The committee, inaugurated on Friday by Taiwo Oyedele, finance minister and coordinating minister of the economy, has been given six weeks to prepare a new framework that will align VAT administration with the Nigeria Tax Act, which took effect on Jan. 1, 2026.
The move comes as authorities seek to translate the country’s most extensive tax reforms in decades into practical rules for taxpayers and administrators. The government says the new order will replace the previous VAT Modification Order issued under the repealed VAT Act and provide greater clarity on exemptions, zero-rated supplies and implementation procedures under the new legal framework.
“This is not about reproducing an old document,” Oyedele said in a statement released Saturday. “It is about developing a VAT Modification Order that is clear, practical and responsive to the needs of a changing economy.”
The minister said the new order is intended to remove uncertainty, simplify compliance for taxpayers, provide clearer guidance for tax administrators and support investment decisions by offering greater certainty over the application of VAT rules.
The committee has been directed to review the legal and administrative framework governing VAT, with particular attention to the exempt and zero-rated provisions contained in Part IV of the Nigeria Tax Act, 2025. It is also expected to identify areas requiring further clarification and recommend a comprehensive schedule of exempt and zero-rated goods and services, including their corresponding Harmonised System Codes.
The recommendations are expected to balance revenue considerations with broader economic and social objectives, including support for industrial development, exports, food security, innovation and Nigeria’s energy transition, while taking account of the country’s treaty obligations and regional integration commitments.
The government also wants the committee to engage extensively with stakeholders across its agencies, the organised private sector, professional bodies and civil society organisations to validate product classifications and address implementation concerns before the order is finalised.
In addition to preparing the draft VAT Modification Order, the committee will submit implementation notes, a stakeholder consultation report and recommendations for legislative amendments where existing tax laws require further refinement.
Oyedele described the tax reform laws, which came into force at the start of the year, as the most far-reaching overhaul of Nigeria’s tax system in decades. According to the minister, the reforms are designed to simplify tax administration, improve certainty, strengthen competitiveness, protect vulnerable Nigerians and lay the foundation for sustainable economic growth.
He said the committee’s work would play a critical role in ensuring that the objectives of the reforms are reflected in day-to-day tax administration.
“Nigerians cannot wait,” Oyedele said. “Businesses need certainty. Investors need confidence. Government needs a VAT system that is easy to administer and supports growth.”
The committee draws members from 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.
The broad representation is intended to ensure that the final order reflects both government policy objectives and the practical realities faced by businesses operating under the new tax regime.
The minister also urged members to draw on international best practices while tailoring the framework to Nigeria’s economic conditions and development priorities. He emphasised that every recommendation should remain consistent with both the letter and the spirit of the new tax laws while helping to improve the ease of doing business and strengthen investor confidence.
“The new Order should remove uncertainty, make compliance easier for taxpayers, support investment decisions and provide tax administrators with clearer guidance in implementing the law,” Oyedele said.
The committee is expected to submit its recommendations within six weeks, after which the government will consider adopting the VAT Modification Order as a key instrument for implementing the new tax regime.
