Nigeria’s House of Representatives has passed for third reading the four tax reform bills submitted by President Bola Ahmed Tinubu in October 2024. This marks a significant step in the administration’s efforts to enhance revenue generation and streamline tax administration in the country.
Key Details:
- Bills Passed:
- Nigeria Tax Bill 2024: Focuses on taxation of income, transactions, and instruments, consolidating legal frameworks related to taxation.
- Tax Administration Bill: Aims to improve the efficiency of tax collection and administration.
- Nigeria Revenue Service Establishment Bill: Establishes the Nigeria Revenue Service to oversee tax assessment, collection, and accounting.
- Joint Revenue Board Establishment Bill: Creates a Joint Revenue Board to harmonize and coordinate revenue administration and resolve disputes.
- Contentious Issues:
- The proposed increase in Value-Added Tax (VAT) from 7.5% to 15% faced significant opposition. The House Committee on Finance retained the VAT rate at 7.5% after public hearings and consultations.
- The bills initially faced resistance from the Northern Nigeria Governors’ Forum and other stakeholders, particularly regarding the VAT derivation model. However, compromises were reached to ensure equitable distribution of VAT revenue.
- Next Steps: The bills will now be transmitted to the Senate for concurrence before being sent to the President for assent.
This development underscores the administration’s commitment to tax reforms as a means of boosting government revenue and addressing fiscal challenges.
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