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Tag: Tax Reform

  • Passage of contentious tax reform bills

    Passage of contentious tax reform bills

    On March 18, 2025, the House of Representatives finally passed the highly contentious tax reform bills sponsored by President Bola Tinubu to upgrade our tax laws.

    All was set for the Senate to do the same, but for the distractions occasioned by the declaration of state of emergency in Rivers State and the “sexual harassment” controversy involving Senate President Godswill Akpabio and Senator Natasha Akpoti-Uduaghan. However, it should be smooth sailing to the desk of President Tinubu since all the obstacles that dogged the bills have been cleared through consensus.

    The four bills are: The Nigerian Tax Administration Bill, Nigerian Revenue Service (Establishment) Bill, Joint Revenue Board Bill and Nigerian Tax Bill which repeals certain taxation acts and consolidates legal frameworks for taxation.

    When the president forwarded the bills to the National Assembly in October last year, it met immediate and stiff oppositions. The 19 Northern Governors and prominent traditional rulers jointly opposed them and called for their immediate withdrawal as, according to them, the derivation model Tinubu sought would negatively affect the region.

    Indeed, Borno State Governor, Babagana Zulum, a key Tinubu ally, granted a passionate television interview telling the President that his tax reforms would impoverish the North.

    Tinubu however made it clear he would not withdraw them. Also, the Nigerian Governors Forum, NGF, at a meeting of the National Economic Council, NEC, chaired by Vice President Kashim Shettima, asked for more consultation and consensus building to carry all sections along. The Presidency sent its officials to explain the reforms to critical stakeholders, while the National Assembly also held consultative forums and public hearings.

    Among the highlights of the bills passed by the House of Representatives are: the reduction of Tinubu’s 15 per cent Value-Added Tax, VAT, to7.5 per cent, pegging of VAT allocation to 50 per cent equality, 20 per cent population and 30 per cent consumption, with net VAT revenue distributed 10 per cent to the Federal Government, 55 per cent to States and the FCT, and 35 per cent to the LGAs.

    The contentious 25 per cent taxing of inheritance was dropped while the legislative arm will henceforth approve waivers by the President and Governors respectively, among other adjustments.

    If the President signs these Bills into Acts, it will be a major triumph of consensus in our democracy. The scriptures say when two agree, they can walk together. We recommend this model in solving similar national issues to cement our unity in diversity.

    With this achievement, President Tinubu’s ambition of driving Nigeria to a trillion US Dollar economy can proceed. Our tax to GDP ratio will greatly improve to reduce heavy dependence on borrowing. Antiquated laws will be brought up to date and our now consolidated tax revenue framework will be beneficial to citizens and businesses.

    Consensus is key!

  • Tax reform, good omen for Nigerians – CITN

    Tax reform, good omen for Nigerians – CITN

    The Chartered Institute of Taxation of Nigeria (CITN), says the tax reform by the Federal Government is a sign of good things to cone for majority of Nigerians.

    Mr Samuel Agbeluyi, the President of CITN, said this while speaking to newsmen on Friday in Jos.

    Agbeluyi is in Jos for CITN’s first Council Meeting for 2025.

    The president explained that the tax bill, if passed into law, would bring sanity into the practice and administration of taxation in Nigeria.

    “As an institute, we are happy over the ongoing dialogue on the new tax bills; if these bills are passed into law, it will make the system better.

    “The reform will improve the revenue of the nation.

    “I’m not talking about increased tax for Nigerians, but the sanity the reform will bring into the practice and administration of taxation in the country.

    “There is no perfect document anywhere in the world, and so the new tax document can be amended when the need arises.

    “So, I urge Nigerians to support the proposed reform because it is a good omen for the nation,” he pleaded.

    Agbeluyi said that the two-day council meeting was also an avenue for the members to brainstorm on critical issues bordering on the tax regime in the country.

  • Tinubu Hails Governors for Backing ‘Pro-Poor’ Tax Reform Bills

    Tinubu Hails Governors for Backing ‘Pro-Poor’ Tax Reform Bills

    President Bola Ahmed Tinubu has commended the Nigeria Governors’ Forum (NGF) for their unanimous endorsement of the four Tax Reform Bills currently under consideration by the National Assembly.

    In a statement issued on Friday by his spokesperson, Bayo Onanuga, Tinubu described the tax reforms as “pro-poor”, emphasizing their role in promoting national interests, enhancing Nigeria’s economic competitiveness, and attracting local and foreign investments.

    “Thursday’s productive consultation between the Nigeria Governors’ Forum and the Presidential Committee on Tax and Fiscal Policy is a commendable example of cooperation between the Federal and State governments,” the statement read.

    The president lauded the governors for their leadership and commitment to transcending regional, ethnic, and political differences to advance Nigeria’s development.

    “President Tinubu extends special commendations to the Chairman of the Governors’ Forum, Kwara State Governor Abdulrahman AbdulRazaq, for successfully galvanizing support among his peers for these transformative tax bills to rejuvenate the national economy and enhance Nigeria’s investment climate,” Onanuga added.

    Tinubu also praised the Progressive Governors Forum, the Northern Governors Forum, and other groups for reaching a bipartisan resolution on the bills.

    He stressed the importance of updating Nigeria’s outdated tax laws as part of a broader strategy to stimulate economic growth.

    “The primary aim of the Tax Reform Bills, which is pro-poor, is to promote national interests, improve the competitiveness of Nigeria’s economy, and attract both local and foreign investments,” Tinubu remarked.

    The president highlighted the power of constructive dialogue, pointing to the recent collaboration between the NGF and the Presidential Committee on Tax and Fiscal Policy Reform as a model for resolving national challenges.

    “President Tinubu regards the governors as vital contributors to nation-building and affirms his commitment to partnering with them to promote economic growth, national harmony, peace, and stability,” the statement noted.

    He urged other stakeholders with ideas for refining the bills to engage with the legislative process and called on the National Assembly to expedite the passage of the reforms.

    “Finally, President Tinubu urges the National Assembly to expedite the legislative process for these crucial bills so that the country can swiftly reap the benefits of the reforms,” the statement concluded.

  • Nigerian Governors Reject VAT Hike, Advocate for Equitable Distribution

    Nigerian Governors Reject VAT Hike, Advocate for Equitable Distribution

    The Nigerian Governors’ Forum has thrown its weight behind the ongoing tax reform efforts in the National Assembly but with a crucial caveat: no increase in Value Added Tax (VAT).

    This stance, articulated in a communique issued following their recent meeting in Abuja, directly contradicts the federal government’s proposal to raise the VAT rate from 7.5% to 10%.

    “We cannot, in good conscience, support any measure that could further burden our citizens during these challenging economic times,” Governor AbdulRahman AbdulRazaq of Kwara State, Chairman of the Forum, declared. “An increase in VAT would undoubtedly impact the cost of living for ordinary Nigerians and hinder economic growth.”

    The governors emphasized the need for economic stability and expressed concerns about the potential inflationary pressures of a VAT increase. They strongly advocated for the continued exemption of essential goods and agricultural produce from VAT, recognizing the critical role these sectors play in the lives of Nigerians.

    “We must prioritize the welfare of our people,” Governor AbdulRazaq stressed. “Exempting essential goods and agricultural produce from VAT is not merely a matter of social justice; it is crucial for ensuring food security and supporting our agricultural sector.”

    Furthermore, the governors proposed a revised VAT-sharing formula that they believe would ensure a more equitable distribution of resources across the country. This formula, they suggest, should allocate 50% of VAT revenue based on equality, 30% based on derivation, and 20% based on population.

    “The current VAT sharing formula is inherently unfair and does not adequately reflect the diverse needs of our states,” Governor AbdulRazaq argued. “Our proposed formula will ensure that all states, regardless of their size or economic output, receive a fair share of this critical revenue stream.”

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    Beyond the VAT increase issue, the governors also expressed their support for the continued funding of key institutions such as the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA). They urged the National Assembly to ensure that these institutions continue to receive their share of development levies.

    The governor’s position now sets the stage for a potential showdown with the federal government over the direction of tax reform. While the federal government seeks to increase revenue through higher taxes, the governors prioritize economic stability and social welfare, arguing that a VAT increase %would be detrimental to both.

    This issue will undoubtedly be a key point of contention in the ongoing dialogue between the federal and state governments as they work to navigate the complex challenges of economic growth and fiscal sustainability.

    The outcome of these discussions will have significant implications for the Nigerian economy and the lives of millions of citizens.