Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, the has clarified that the proposed increase in Value Added Tax (VAT) rates will not trigger inflation.
Speaking yesterday, Oyedele outlined key changes in the VAT framework that distinguish the current proposal from past policies.
This marks a notable departure from his stance in 2019, when he warned that a VAT rate hike could fuel inflation.
At the time, the proposal focused on a blanket increase that affected nearly all items, including basic consumption goods, without allowing businesses to claim tax credits for VAT paid on most of their costs.
The 2024 proposal, however, adopts a more targeted approach.
Oyedele emphasized that the new measures aim to balance revenue generation with economic stability, ensuring minimal impact on household spending and inflation.
“The concern in 2019 was valid given the structure of the VAT system at the time.
“But today’s proposal is fundamentally different. It’s designed to protect low-income earners and stimulate economic growth.” He explained.
The reforms align with the broader objectives of the Presidential Committee on Fiscal Policy, which seeks to streamline Nigeria’s tax system, reduce compliance burdens, and promote economic inclusivity.
