President Bola Tinubu has expressed support for the National Economic Council’s (NEC), recommendation to withdraw the proposed tax reform bills currently before the National Assembly for further consultation.
During a recent address, President Tinubu commended the NEC members, particularly Vice President Kashim Shettima and the 36 State Governors, for their valuable input on the matter.
He stated, “The legislative process, which has already begun, provides an opportunity for inputs and necessary changes without withdrawing the bills from the National Assembly.”
The President urged the NEC to allow the legislative process to unfold, while welcoming further consultations with key stakeholders to address any concerns regarding the bills.
In August 2023, President Tinubu established the Presidential Committee on Tax and Fiscal Policy Reform, with the goal of repositioning the economy for greater productivity and efficiency. He noted that this objective remains critical in the current economic climate.
The Committee, which worked for over a year, collected input from various segments of society, including trade associations, professional bodies, ministries, governors, traders, students, business owners, and the organized private sector.
The resulting tax reform bills are designed to streamline Nigeria’s tax administration processes and align them with global best practices.
The four major bills currently before the National Assembly include: The Nigeria Tax Bill which aims to eliminate multiple taxation and simplify tax obligations for businesses and individuals, enhancing Nigeria’s competitiveness.
The second is the Nigeria Tax Administration Bill (NTAB), a legislation proposes new rules for administering all taxes in the country, intending to harmonize processes across federal, state, and local jurisdictions to facilitate taxpayer compliance and boost revenue.
Others include the Nigeria Revenue Service (Establishment) Bill, a bill that seeks to re-establish the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS), reflecting its role as the revenue agency for the entire federation. The fourth is the Joint Revenue Board Establishment Bill, a proposal aims to create a Joint Revenue Board to replace the existing Joint Tax Board, covering all federal and state tax authorities, and to establish an Office of Tax Ombudsman to protect taxpayer interests and resolve disputes.
The overarching aim of these bills is to effectively coordinate federal, state, and local tax authorities, addressing the overlapping responsibilities and inefficiencies that have historically plagued Nigeria’s tax administration.
Currently, various 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) are administered separately, leading to administrative fragmentation. The proposed reforms seek to consolidate these taxes into a unified structure.
While differences in approach and specific provisions of the new tax bills may arise, President Tinubu emphasized that there is a consensus on the necessity of reviewing tax laws and their administration to align with Nigeria’s national development agenda.
He reaffirmed his commitment to respecting and welcoming the recommendations of the National Economic Council, which serves as an essential constitutional body on economic matters.