Tinubu Removes VAT on Rent, Public Transport, and Renewable Energy: What It Means for Nigerians
In a major development that promises financial relief for millions of Nigerians, President Bola Ahmed Tinubu has announced the removal of Value Added Tax (VAT) from essential services like rent, public transportation, and renewable energy. This move is part of a broader tax reform plan aimed at reducing the cost of living, boosting economic growth, and promoting fairness in Nigeria’s tax system.
This announcement was made during his second-year anniversary speech as President, where he outlined several bold steps his administration is taking to make life easier for ordinary Nigerians while building a stronger economy.
Let’s break down what this means for the average Nigerian and how the new tax policies will impact rent, transport, food, healthcare, small businesses, and more.
VAT Removal: Rent, Transport, and Renewable Energy Now Tax-Free
One of the most immediate and impactful parts of the President's announcement is the exemption of Value Added Tax (VAT) from rent payments, public transportation services, and renewable energy sources.
What does this mean?
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If you pay rent, you will no longer be charged VAT on it.
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If you take public transport like buses or taxis, those services will also be VAT-free.
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If you install solar panels or other renewable energy systems, you won’t have to pay VAT either.
This change directly reduces costs for Nigerian households. With the high cost of living and inflation affecting many families, this move is designed to make life a little easier.
Tinubu’s Words on the Tax Reform Agenda
President Tinubu, in his speech, made it clear that the decision was a strategic one aimed at supporting low-income households and creating a fairer economy:
“One of our administration's most impactful achievements is our bold tax reform agenda, which is already yielding results. By the end of 2024, our tax-to-GDP ratio rose from 10% to over 13.5%, a remarkable leap in just one year. 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.”
This is a significant change. For years, Nigeria has struggled with a low tax-to-GDP ratio, which means that the government hasn't been collecting enough revenue compared to the size of the economy. Improving that ratio without increasing the burden on citizens is a delicate task—and Tinubu’s administration is attempting to do just that.
No More VAT on Essential Goods: Food, Education, and Healthcare Now at 0%
In addition to rent and transport, Tinubu also revealed that essential goods and services—like food, education, and healthcare—will now be taxed at 0% VAT.
This is massive news for Nigerian families.
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School fees, medical bills, and staple food items will now be cheaper.
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Parents sending their children to school or families needing medical care will save money.
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Local food markets and small vendors are expected to benefit as well, since the cost of doing business will reduce.
The President emphasized:
“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.”
This signals a shift toward a more socially responsible tax system—one that prioritizes the needs of the people over mere revenue collection.
Ending Wasteful Tax Waivers, Introducing Targeted Incentives
Not all tax waivers are created equal. Tinubu acknowledged that past governments gave out tax breaks in ways that were "wasteful and opaque."
That’s changing under his administration.
“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.”
What this means is that tax breaks will now be used more strategically. Instead of giving waivers to companies that don’t need them or fail to deliver value, the government will now focus incentives on sectors that:
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Create jobs
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Drive innovation
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Support local production
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Export Nigerian-made goods
This includes manufacturing, tech startups, and agriculture—sectors that are key to Nigeria’s long-term economic stability.
Support for Youth and Digital Economy
The President also focused on Nigeria’s young population, many of whom are active in digital jobs, remote work, freelancing, and tech startups.
According to Tinubu:
“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.”
This means that freelancers and tech entrepreneurs will now enjoy a more favorable tax system, giving them the breathing space to scale up their work and contribute to the economy.
The National Single Window project, which he referenced, is also expected to reduce bureaucratic delays at ports and borders—making it easier for Nigerian businesses to trade internationally.
Protecting Small Businesses: A New Tax Ombudsman
In a major step toward tax justice and fairness, Tinubu announced the establishment of a Tax Ombudsman. This is an independent body that will protect taxpayers, especially small businesses, from abuse or unfair treatment by tax authorities.
“To promote fairness and accountability, we are establishing a Tax Ombudsman, an independent institution that will protect vulnerable taxpayers and ensure the system works for everyone, especially small businesses.”
This is the first time Nigeria will have such an institution dedicated solely to ensuring that tax authorities are accountable and that citizens’ rights are respected during tax administration.
New National Fiscal Policy to Guide Responsible Governance
Beyond VAT reforms and tax breaks, President Tinubu also announced a new national fiscal policy—a strategic framework that will guide how the country manages:
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Taxation
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Borrowing
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Government spending
“Most importantly, we are 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.”
This policy aims to ensure that Nigeria does not borrow recklessly, and that public funds are spent transparently and efficiently. This is a big step toward rebuilding public trust in government finances.
What Does This Mean for You?
Here’s a quick summary of how Tinubu’s tax reforms will affect everyday Nigerians:
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Your rent will no longer include VAT, meaning more money in your pocket.
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Food, school fees, and healthcare costs will drop due to 0% VAT.
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Transportation will be cheaper, especially for those relying on buses, keke, and other public options.
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Solar energy installations will be more affordable, encouraging more Nigerians to go off-grid.
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Freelancers and small businesses in tech and export sectors will enjoy new tax-friendly environments.
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A new Tax Ombudsman will help protect you from unfair taxation.
Conclusion: A Bold Step Toward a Fairer Nigerian Economy
President Tinubu’s new tax reforms are some of the most ambitious in recent Nigerian history. By removing VAT on rent, public transport, food, education, healthcare, and renewable energy, his administration is directly addressing the cost-of-living crisis faced by millions of Nigerians.
At the same time, these policies aim to grow the economy in the long term by supporting youth, digital entrepreneurs, exporters, and key industries.
While challenges remain, these reforms are a positive step toward building an inclusive, fair, and growth-oriented Nigerian economy.
