President Bola Tinubu has announced a 0% VAT rate on essential goods and services
Under this new policy, rents, public transportation, and renewable energy will be completely exempt from Value Added Tax (VAT).
Announcing the move during his second-year anniversary statement, the President explained that this step aims to ease the financial burden on households. Essential items like food, education, and healthcare will also now attract zero VAT.
He stated:
“One of our administration’s most significant achievements is our bold tax reform agenda, which is already delivering results. By the end of 2024, our tax-to-GDP ratio increased from 10% to over 13.5%, a remarkable rise in just one year. This is no accident but the outcome of deliberate improvements in tax administration and policies focused on fairness, efficiency, and growth.
We are removing the weight of multiple taxation, making it easier for small businesses to grow and formalize. These reforms protect low-income households and increase disposable income for workers. Essential goods and services—food, education, healthcare—will now have 0% VAT. Rent, public transportation, and renewable energy are fully exempt from VAT to further reduce household costs.
We are ending the era of inefficient and unclear tax waivers, replacing them with targeted, transparent incentives for high-impact sectors like manufacturing, technology, and agriculture. These reforms are designed not only to boost revenue but to stimulate inclusive economic growth.
There is a strong focus on youth empowerment through a friendlier tax environment for digital jobs and remote work. Export incentives will help Nigerian businesses compete globally. Our National Single Window project streamlines international trade, reduces delays, and enhances Nigeria’s competitiveness.
To ensure fairness and accountability, we are establishing a Tax Ombudsman—an independent body to protect vulnerable taxpayers and ensure the tax system serves everyone, especially small businesses.
Most importantly, we are laying the groundwork for a sustainable future with a new national fiscal policy guiding fair taxation, responsible borrowing, and disciplined spending.
These reforms aim to lower the cost of living, promote economic justice, and build a business-friendly economy that attracts investment and supports all Nigerians. Together, we are creating a system where prosperity is shared and no one is left behind.”
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