FG removes VAT on foods, education, healthcare, describes tax reforms as most impactful

The federal government has removed Value Added Tax (VAT) on essential goods and services. President Bola Tinubu said this on Thursday in a statement to mark the second anniversary of his administration. He particularly said goods like foods, education and healthcare would benefit from the removal of VAT. Tinubu said the removal of VAT on essential goods and services is a fallout from the current tax reforms of his administration intended to protect low-income households and support workers by expanding their disposable income. He said “We are eliminating the burden of multiple taxation, making it easier for small businesses to grow and join the formal economy. The tax reforms will protect low-income households and support workers by expanding their disposable income. Essential goods and services such as food, education, and healthcare will now attract 0% VAT. Rent, public transportation, and renewable energy will be fully exempted from VAT to reduce household costs further.
“We are ending the era of wasteful and opaque tax waivers. Instead, we have introduced targeted and transparent incentives supporting high-impact manufacturing, technology, and agriculture sectors. These reforms are not just about revenue, but about stimulating inclusive economic growth.” The President described the tax reforms as most impactful achievements of his administration. He said the bold tax reform agenda had already been yielding positive yielding results as the country’s tax-to-GDP ratio had risen from 10% by the end of 2024 to over 13.5%.
“This was not by accident. It results from deliberate improvement in our tax administration and policies designed to make our tax system fairer, more efficient, and more growth-oriented. We are eliminating the burden of multiple taxation, making it easier for small businesses to grow and join the formal economy. The tax reforms will protect low-income households and support workers by expanding their disposable income. Essential goods and services such as food, education, and healthcare will now attract 0% VAT.
“Rent, public transportation, and renewable energy will be fully exempted from VAT to reduce household costs further,” he said. Tinubu said the federal government was putting an end to the era of wasteful and opaque tax waivers. “Instead, we have introduced targeted and transparent incentives supporting high-impact manufacturing, technology, and agriculture sectors. These reforms are not just about revenue, but about stimulating inclusive economic growth. There is a deliberate focus on our youth, who a friendlier tax environment for digital jobs and remote work will empower. Through export incentives, Nigerian businesses will be able to compete globally. Our National Single Window project streamlines international trade, reduces delays, and enhances Nigeria’s competitiveness,” he said. The president said the federal government was establishing a Tax Ombudsman, an independent institution that will protect vulnerable taxpayers and ensure the system works for everyone, especially small businesses. He said government was also laying the foundation for a more sustainable future by introducing a new national fiscal policy.
“This strategic framework will guide our approach to fair taxation, responsible borrowing, and disciplined spending. These reforms are designed to reduce the cost of living, promote economic justice, and build a business-friendly economy that attracts investment and supports every Nigerian. Together, we are creating a system where prosperity is shared, and no one is left behind,” he said.