Business
VAT Rate May Increase
The Value Added Tax (VAT) may be increased in an attempt by the Federal Government to harmonise Nigeria’s Value Added Tax (VAT) Act with the Economic Community of West African States (ECOWAS) directives.
At the moment, Nigeria’s VAT rate is less than one per cent to its Gross Domestic Product (GDP).
The initiative to adjust the VAT came to the fore, Tuesday, in Abuja at a three-day workshop on Nigeria’s VAT Law, organised by the ECOWAS Commission under the context of implementation of the Support Programme for Tax Transition in West Africa (PATF).
At the parley, the government said the country’s VAT performance was the lowest in the West African region, describing the development as worrisome.
PATF is geared towards improving the management of domestic taxation and ensuring better coordination in ECOWAS and West African Economic and Monetary Union (WAEMU) regions.
Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Basheer Abdulkadir, said exemptions of VAT in Nigeria were not aligned with those of ECOWAS.
In the meantime, companies that were unable to file their Companies Income Tax returns for this Year of Assessment (YOA) that fell due on June 30, 2023 have been given up to August 31 to submit their returns to the Federal Inland Revenue Service (FIRS).
The FIRS, in a statement signed by Johannes Oluwatobi Wojuola, Special Assistant (Media and Communication) to the Executive Chairman, stated that it had “received numerous calls from companies requesting for the extension of time to submit their Companies Income Tax (CIT) returns as they were unable to meet up with the deadline due on June 30, 2023”.
The FIRS noted that it agreed to extend the deadline for submission of CIT returns to companies “as a measure of goodwill and in line with relevant provisions of the Companies Income Tax Act.
“All companies whose CIT returns for 2023 year of assessment that fall due between June 30 and August 31, 2023 (both days inclusive) are given up to August 31 to submit the returns to the FIRS”.
On the VAT, Abdulkadir called for the exemption of few products, goods and services so that poor households could benefit from the policy.
He also called for the need to allow for tax input credit for intermediate and capital expenditure.
“Our VAT performance or rate is still one of the lowest. Nigeria has a VAT of less than one per cent to the GDP and this is worrisome.
“Also, we have the lowest VAT within the sub-region with an average of 16 per cent, while VAT rate in Nigeria is 7.5 per cent. So we need a lot of policy changes on tax administration as we also need to come up with strategies to address some of these issues”, he stated.
He said the exemptions of VAT in Nigeria are not aligned with those of the ECOWAS and we know that these exemptions are some of the issues that have to do with revenue mobilisation under the VAT.
Also speaking, Director of VAT, Federal Inland Revenue Service (FIRS), Lovette Onanuga, stated that VAT has the potential to raise a significant amount of revenue for the government.
Onanuga, while reiterating Nigeria’s commitment to ensuring the success of the PATF programme, described the workshop as timely.
“These three days’ workshop is very important. For example the study of the Harmonisation of Nigeria’s VAT Act with ECOWAS Directives will contribute to establishing coherence in the domestic systems of taxation and the realisation of the attainment of a common market and the Evaluation of VAT Performance will enable us to look more deeply into issues that will help improve VAT revenue collections”, she said.
ECOWAS Director of Customs Union and Taxation, Salifou Tiemtore, called on the government to put in place an appropriate institutional framework before the commencement of the implementation of the initiative.
Tiemtore, who was represented by Felix Kwakye, stressed the need for the evaluation of VAT performance, adding that the measure will outline issues that need to be addressed by the government of Nigeria to improve VAT revenue collections.
Oluwatobi Wojuola also assured companies that “the relevant Companies Income Tax returns will not attract late filing penalties or interests if payments were made on or before 31st August 2023.
He, however, warned that “where companies fail to file by the extended date, the penalty and interest for late payment will be computed from the original due date”.
According to Wojuola, “the relevant CIT returns shall, therefore, not attract Late Filing Penalty or interest for late payment if submitted to the Service on or before 31st August 2023.
“Where relevant CIT returns are not filed by the extended date, penalty and interest for late payment shall be computed from the original due date and not the extended date”.
The Service added that the grace period extended to companies to file their CIT returns does not cover “returns for withholding tax, value added tax, personal income tax (PAYE), among others.
Wojuola appealed to companies “to take the opportunity afforded by this extension to submit their CIT returns within the specified time, pay the taxes due and avoid payment of penalty and interest”.
The Minister of State for Industry, Trade and Investment, John Enoh said this at the 8th annual induction and conference of the Chartered Institute of Project Managers of Nigeria (CIPMN).
He explained that abandoned projects continue to lock up public funds that could have been used for infrastructure development, industrial growth, job creation and essential social services.
Represented by the ministry’s Permanent Secretary, Chris Osa Isokpunwu, he said the impact goes beyond financial losses, as incomplete projects affect communities and limit access to important public services
He cited examples of that remain unopened, schools that cannot accommodate students, roads that fail to connect communities and electricity projects that have not delivered their intended benefits.
The Registrar-General and Chief Executive Officer of CIPMN, Henry Ifeanyi Mbadiwe, also identified poor project management as a major challenge affecting development in Nigeria.
He revealed that the institute had developed a project management curriculum for Nigerian universities, which has received approval from the National Universities Commission (NUC). The programme is expected to enable universities to offer project management as a bachelor’s degree.
Mbadiwe further referenced findings by the Presidential Projects Assessment Committee, which identified 11,886 ongoing federal capital projects in 2011, with an estimated financial commitment of ?7.78 trillion.
He noted that inadequate planning, supervision, accountability and implementation were among the factors contributing to the abandonment of projects across the country.
The minister called for stronger project management structures across ministries, departments and agencies to improve planning, monitoring and evaluation.
He added that the Federal Ministry of Industry, Trade and Investment had introduced a 90-day implementation reporting cycle to strengthen transparency and monitor the progress of government programmes.
Ikenga said the company remained committed to Nigeria’s power sector and would continue investing in its operations despite the challenging business environment.
He spoke in Lagos at the third edition of the Shell Power Conference, themed “Powering Nigeria’s Progress: Turning Ambition and Action into Sustainable Impact”.
The Transcorp Power chief said the company would sustain electricity generation, invest in its facilities and deliver value to shareholders.
“Transcorp Power is a long-term player, not a short-term player. This year has been challenging, but what is important is getting power to schools, hospitals and businesses to power progress,” he said.
Ikenga said the company’s focus on operational efficiency and investment had strengthened its contribution to Nigeria’s electricity supply.
He disclosed that since acquiring the Ughelli Power Plant in Delta State in 2013, Transcorp Power had quadrupled its available generation capacity.
He also said the company became the first privatised power generation firm to receive a post-privatisation discharge certificate after fulfilling all its privatisation obligations.
The company’s unaudited results for the nine months ended September 30, 2026, showed a profit before tax of N83.1 billion, while its profit-before-tax margin rose to 31.2 per cent from 29.6 per cent recorded in the corresponding period of 2025.
Its total assets rose to 11.7 per cent amounting to N629.5 billion, while shareholders’ funds grew 8.9 per cent to N199.8 billion. Cash and cash equivalents also rose to N10.3 billion, supported by improved collections.
On the company’s contribution to grid stability, Ikenga said Transcorp Power’s black-start capability enabled it to restart operations without relying on electricity from the national grid.
He explained that the capability allowed the company to support power restoration following grid disturbances, helping to restore electricity supply to homes, businesses and industries.
Ikenga noted that Nigeria had an installed electricity generation capacity of about 13,000 megawatts, with an estimated potential of 50 gigawatts, adding that realising the potential would require effective coordination across the entire value chain.
“Everything in the value chain has to work,” he said.
He called for stronger collaboration among federal and state governments, regulators and private-sector operators, alongside increased private investment, to build a sustainable electricity market.
This was contained in a statement issued on Thursday by his Senior Special Assistant on Communications and Press Secretary, Maryann Duke.
The statement said Oyedele pointed to “improved digital systems, including electronic invoicing, as a key driver behind a record of N33tn in government revenue collected between January and October 2026.”
The minister said the performance demonstrated the potential of technology to improve revenue administration, strengthen compliance and increase efficiency across government institutions.
Speaking on the theme, ‘Digital Sovereignty and Ethics: Guarding the Economy for the Next Generation,’ Oyedele warned that Nigeria risked losing substantial economic opportunities if it continued to depend heavily on foreign digital infrastructure.
Citing Nigerian Communications Commission figures, he disclosed that the country recorded more than 157 million active internet subscriptions as of May 2026.
He explained that these connections generated significant volumes of information through financial transactions, healthcare, education and taxation.
However, citing estimates from the Nigeria Data Protection Commission, Oyedele said as much as 90 per cent of the country’s data was hosted abroad.
According to him, the situation has implications for foreign exchange expenditure, employment opportunities, technological skills and Nigeria’s control over information generated by its citizens.
He compared the country’s reliance on foreign digital infrastructure with its historical dependence on imported refined petroleum products, warning against a situation where Nigerian data would be processed abroad and the resulting services sold back to domestic users.
The minister consequently advocated greater investment in local data infrastructure, technical expertise, cybersecurity and predictable regulations to enable Nigerian businesses to capture more value from the digital economy.
He clarified that digital sovereignty should not translate into technological isolation but should strengthen Nigeria’s capacity to participate competitively in international markets.
Addressing graduating students, Oyedele urged young Nigerians to become developers of technological solutions rather than remain primarily consumers of products created elsewhere.
He identified artificial intelligence as both a disruptive force and an opportunity for innovation, advising graduates to acquire relevant digital skills alongside critical thinking, creativity, sound judgement and integrity.
The minister also cautioned against irresponsible online behaviour, explaining that digital footprints increasingly influence employment prospects, commercial relationships and professional credibility.
Oyedele outlined five priorities for graduates, including continuous learning, value creation, integrity, responsible digital citizenship and active participation in national development.
“Your degree is evidence of what you have learned. Your competence will demonstrate what you can do. Your character will reveal who you truly are,” he told the graduating students.
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