Nigeria Just Kicked Food, School Fees & Farm Inputs Out of the VAT Net
The Big Picture: Nigeria’s tax rulebook is getting its biggest rewrite since independence, and the first headline item is a crowd-pleaser,zero VAT on food, education, transport and agriculture. The Federal Inland Revenue Service (FIRS) says the move will cushion household budgets while still shoring up government coffers.
The Details: In an anniversary interview marking two years in office, FIRS Executive Chairman Zacch Adedeji told Punch that the reform package “is the best thing that has happened to Nigeria’s fiscal ecosystem since 1960.” The new single tax code, slated to kick in on 1 January, collapses a maze of levies into single digits, scraps VAT on the everyday essentials above, and wipes corporate income tax for businesses turning over less than ₦50 million a year. Personal income-tax thresholds are also being raised to keep low-wage earners out of the tax dragnet.
Why It Matters: FIRS insists the reliefs will not blow a hole in revenue because the wider reform quartet, the Nigeria Tax Act, 2025, Tax Administration Act, Revenue Service Establishment Act, and Joint Revenue Board Act,broadens the base and tightens compliance across all tiers of government. Adedeji credits President Bola Tinubu for “removing all burdens and hurdles” that once stifled businesses.
The reaction was swift: Tax advisers are already fielding calls from food-processing and transport operators eager to recost pricing models. Meanwhile, SMEs below the ₦50 million mark are crunching numbers to see just how tax-free 2026 might look.
AROUND THE TAX WORLD
• Budget Booster Shot: Speaker Tajudeen Abbas predicted that Tinubu’s reforms could lift Nigeria’s national budget “at least five-fold” within two years, thanks to leak-proof revenue channels (Guardian).
• E-Invoices Go Live: FIRS rolled out its Merchant-Buyer Solution for companies with ₦5 billion+ turnover; over 1,000 firms, including MTN Nigeria, are already sending real-time invoices to the taxman (MSN).
• No Free Pass for ‘Runs Girls’: The Presidential Fiscal Policy Committee’s Taiwo Oyedele warned that income from sex work and other informal gigs will be taxable under the new laws,"any service rendered in exchange for money will be taxed," he told a Lagos church audience (Street Journal).
TAX STAT OF THE DAY
Prime Number: ₦50 million, the annual turnover below which small businesses will owe zero corporate income tax under the new code (Punch).
LOOKING AHEAD
All eyes are on 1 January 2026, when the consolidated tax code, and its VAT-free essentials, formally takes effect. Expect a flurry of implementation guidelines from FIRS in the coming weeks.
Prepared by MyTax - mytax.com.ng