ACF strongly opposes VAT increase and shares key recommendations with National Assembly
On Monday, February 24, 2025, the Arewa Consultative Forum (ACF) submitted a detailed report to the National Assembly regarding the proposed Executive Tax Reforms Bills.
These bills aim to change Nigeria’s tax laws, and ACF’s report includes observations and recommendations from a committee of experts who carefully reviewed the proposals.
According to Prof. Tukur A. Muhammad-Baba, the National Publicity Secretary of ACF, the forum believes the tax reforms will affect the entire country, not just Northern Nigeria. To make sure all voices are heard, ACF has shared the report with various groups, including:
- Northern State Governors’ Forum
- Traditional rulers and interest groups
- Relevant government agencies
- The general public and media (through e-copies)
The ACF’s main concern is the proposed increase in the Value Added Tax (VAT). The forum strongly opposes any hike, citing the ongoing economic hardship faced by citizens and businesses. Instead, ACF recommends:
- Keeping VAT at the current rate of 7.5%
- Improving VAT collection efficiency
- Encouraging private sector investments to expand the tax base
- Exempting agricultural equipment from VAT
The forum also suggests changes to the proposed bills, including:
- Revising terms like “supply and supplies” to “consumption or consumptions” for better understanding
- Defining the term “derivation” clearly and ensuring tax distribution is based on state and local government agreements
- Introducing street naming and house numbering in cities to improve taxpayer traceability
- Setting annual limits on tax exemptions to prevent revenue loss
- Reducing the absolute powers given to CEOs and Chairmen in the bills
- Changing the number of Coordinating Directors from 8 to 6, nominated by the President and confirmed by the Senate
- Creating a Development Levy to fund education and tech-related projects
ACF also recommends replacing the term “ecclesiastical” with “religious” and removing certain sections that allow religious institutions to handle taxation under Sharia and customary laws. Additionally, ACF proposes allowing businesses to submit tax records in local languages, not just in English.
The forum encourages all Nigerians, especially stakeholders, to participate in the National Assembly’s public hearings on the tax reforms. “For posterity and national duty, we encourage all stakeholders to engage in discussions that will shape tax laws to serve Nigeria’s interests. Let us ensure that the tax laws we create today stand the test of time,” said Prof. Muhammad-Baba.
