The national assembly is considering a bill proposing an increase in the value-added tax (VAT) from 7.5 percent to 10 percent.
In the executive bill seen by TheCable on Sunday, the national assembly is seeking to raise the tax rate to 10 percent by 2025.
The legislature also intends to increase the VAT to 12.5 percent by 2026 through 2029, according to the document.
“VAT shall be charged on the value of all taxable supplies at the following rates (a) 2025 year of assessment 10%; (b) 2026, 2027 2028 and 2029 years of assessment 12.5% (c) 2030 year of assessment and thereafter 15%,” the document reads.
“Tax shall be levied, for each year of assessment in respect of total profits of every company, in the case of; (a) a small company, at zero percent; and (b) any other company, at the rate of-(i) 27.5% in 2025 year of assessment, and(ii) 25% from 2026 year of assessment,” the document added.
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“Notwithstanding any provision of this Act or any other enactment, where, in any year of assessment, the effective tax rate of a company is less than 15%, such company shall recompute and pay an additional tax that makes its effective tax rate equal to 15%.
“The provisions of this section shall apply to (a) a company that is a constituent entity of an MNE group; and (b) any other company with an aggregate turnover of N20,000,000,000.00 and above in the relevant year of assessment.
“The companies covered under this section and the determination of the additional tax payable shall be in accordance with regulations issued by the Service,”the document concluded.
Earlier this month, the federal government released the gazette withholding tax regulations expected to take effect from January 1, 2025.
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