Tax Reform: Tinubu announces 0% VAT on food, education, healthcare

By Kunle Sanni

President Bola Tinubu on Thursday announced that essential goods and services such as food, education, and healthcare will now be subject to zero percent Value Added Tax (VAT).

In a statement marking the second anniversary of his administration, Tinubu said the move is part of a broader effort to protect low-income families and promote inclusive economic growth.

“Essential goods and services such as food, education, and healthcare will now attract 0% VAT. Rent, public transportation, and renewable energy will be fully exempt from VAT to further reduce household costs,” he said.

The President highlighted these measures as central to a “bold tax reform agenda” that is reshaping Nigeria’s fiscal landscape. According to Tinubu, Nigeria’s tax-to-GDP ratio increased from 10% to over 13.5% by the end of 2024 — the fastest growth in the nation’s recent history.

“This was not by accident. It resulted from deliberate improvements in our tax administration and policies designed to make our tax system fairer, more efficient, and more growth-oriented,” he added.

Beyond VAT reforms, Tinubu noted that his administration has eliminated multiple taxation barriers that stifled small businesses, while ending opaque tax waivers in favor of transparent incentives for key sectors such as manufacturing, technology, and agriculture.

“These reforms are not just about revenue but about stimulating inclusive economic growth,” he said.

The President also revealed that, thanks to these fiscal measures, state governments saw a combined revenue increase of over ₦6 trillion in 2024. This, he said, has enabled them to reduce debt, pay salaries and pensions on time, and invest more in infrastructure and human capital development.