FG projects N45trn VAT revenue by 2026
By Felicia Nwosu
The Federal Government of Nigeria has concluded plans to increase revenue accruing from Value Added Tax (VAT) from an average of N35 trillion in 2024, to N40 trillion in 2025 and N45 trillion in 2026 fiscal years, respectively.
The breakdown of the 3-year projected revenue was contained in the 2024-2026 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), released recently.
According to the document transmitted by President Bola Ahmed Tinubu to the National Assembly, the “VAT was projected using estimated aggregate nominal consumption, taking into account vatable items and collection efficiency. Consumption expenditure on which VAT is charged is assumed to increase from an average of N35 trillion in 2024, to N40 trillion in 2025 and N45 trillion in 2026, after adjusting for exemptions, zero-rated items and companies whose turnover falls below the N25 million threshold.
Like the CIT, more VAT payers are expected to be brought into the tax net with the effective implementation of the provisions of the various Finance Acts. The VAT projections over the medium-term are based on holding the rate at 7.5%.
In another development, the federal government has also announced that it has granted Value Added Tax (VAT) waiver on the Compressed Natural Gas (CNG) buses as part of the efforts to build a cheap and clean energy source transportation system in the country.
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