The Federal Inland Revenue Service (FIRS) has announced that Nigeria’s sweeping new tax reforms will exempt key sectors including food, education, agriculture, and shared transportation services from value added tax (VAT).
Under Section 187 of the new tax law, VAT has been set at zero percent for basic food items, medical and pharmaceutical products, as well as tuition fees across primary, secondary, and tertiary institutions.
In agriculture, the exemption covers essential inputs such as tractors, ploughs, fertilisers, seeds, animal feed, and veterinary medicines, significantly reducing costs for farmers. In addition, new companies in the agriculture sector will enjoy a five year income tax holiday aimed at spurring investments in agribusiness and strengthening food security.
The reforms are part of a package of laws signed in June 2025 which include the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service Act, and the Joint Revenue Board Act.
These laws, set to take effect on January 1, 2026, overhaul Nigeria’s tax framework. Notably, the FIRS will be replaced by the Nigeria Revenue Service (NRS), a central body with expanded powers to streamline tax administration and unify collections across federal, state, and local levels.
Officials say the exemptions will provide relief for households, ease the cost of education, and stimulate growth in agriculture. However, the government is expected to rely on improved compliance and a broader tax base to offset revenue lost through these exemptions.
