The Nigerian government is making big moves to fix the economy and one of the biggest plans is a new tax reform. The goal is to o make tax collection fairer and help businesses grow without overburdening Nigerians.

Dr. Jumoke Oduwole, the Minister of Industry, Trade, and Investment, made it clear during a recent event in Lagos that the government is serious about creating an environment where businesses can thrive.

If we don’t support businesses in Nigeria, we won’t get the investments we need to boost our economy, she said.

A major part of the new plan is changing the country’s VAT (Value-Added Tax). Right now, Nigeria’s tax-to-GDP ratio is just 10.8%, which is pretty low. This means the government has been relying a lot on borrowing.

To fix this, they plan to increase VAT to 12.5% by 2026, but with a catch essentials like food and medicine won’t be taxed.

According to Taiwo Oyedele, who is leading the tax reform team, this should actually lower prices for everyday Nigerians because most of their spending is on these exempted essentials.

But not everyone is convinced. Some people worry that raising VAT could hurt businesses and reduce how much people spend.

Adewunmi Emoruwa, a public strategy expert, pointed out that the government might be adding more financial pressure on citizens.

There’s also some debate about how the tax money will be shared across the country. The Nigeria Governors’ Forum has suggested a new formula that gives 50% of the tax revenue equally to all states, 30% based on how much tax they generate, and 20% according to population.

The government is still considering this proposal.