Nigeria’s President Bola Ahmed Tinubu recently transmitted four tax reform bills to the National Assembly (NASS) for review and approval on September 3, 2024, following the recommendations of the Oyedele-led Tax Reforms Committee. These bills aim to address long-standing inefficiencies in the Nigerian taxation sector, where multiple institutions carry out almost the same mandate. The President has stated that his goal is to boost economic competitiveness and streamline revenue collection.
Key Highlights of the Bills
1. The Nigeria Tax Bill
This Bill seeks to eliminate multiple taxation, simplifying tax obligations for businesses and individuals nationwide. By fostering a more competitive economic environment, it aims to attract foreign and local investment while promoting ease of doing business.
2. The Nigeria Tax Administration Bill (NTAB)
Proposing new rules governing the administration of all taxes in the country, the NTAB harmonizes tax administrative processes across federal, state, and local jurisdictions. This alignment will ease compliance for taxpayers while improving revenue generation for all levels of government.
3. The Nigeria Revenue Service (Establishment) Bill
This Bill seeks to re-establish the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS). The name change reflects its broader mandate as the revenue agency for the entire federation, rather than just the Federal Government.
4. The Joint Revenue Board Establishment Bill
This Bill proposes the creation of a Joint Revenue Board to replace the existing Joint Tax Board. It includes the establishment of the Office of Tax Ombudsman under the Joint Revenue Board, a significant move to protect taxpayers’ interests and facilitate dispute resolution.
Resistance and Controversy
Despite the reforms’ ambitious goals, state governors, the National Executive Council, and even prominent personalities have demanded the withdrawal of the executive bills, citing the need for wider consultation and public input. However, President Tinubu has maintained that amendments can be made when the bills are debated in the Senate and House of Representatives.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga, recently defended the bills, stating that their focus will be to effectively coordinate federal, state, and local tax authorities. This coordination is expected to eliminate overlapping responsibilities, inefficiencies, and administrative confusion that have plagued Nigeria’s tax system for decades.
Under the proposed reforms, taxes such as Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), and Value-Added Tax (VAT) will be integrated into a unified structure. This consolidation is designed to reduce administrative fragmentation and enhance the efficiency of tax collection.
In a major shift, revenue-generating agencies like the Nigerian Customs Service and Nigerian Ports Authority will no longer collect government revenues directly. Instead, a centralized agency, the Nigeria Revenue Service, will handle revenue collection.
The Senate President, Godswill Akpabio, and the House of Representatives Speaker, Tajudeen Abbas, have read President Tinubu’s letter outlining the bills on the floor of the house for legislative deliberations.
The Tinubu Tax Reforms Have the Potential to:
Increase government revenue by addressing tax leakages.
Simplify the compliance process for businesses and individuals, saving valuable time and growing the economy.
Bring accountability, transparency, and growth to Nigeria’s tax system.
Tax reforms hold untapped potential for Nigeria. By sealing leakages, the government could generate more revenue to invest in critical sectors like health and education. Real-time tracking of the tax system with weekly and monthly updates is essential. However, the President should liaise with civil societies and governments at all levels to reach a balance that will cut waste and build a great country.
May Nigeria succeed.
Ubong Usoro
