President Bola Ahmed Tinubu has reaffirmed his commitment to the legislative process for the tax reform bills under consideration by the National Assembly, following recommendations from the National Economic Council (NEC) to withdraw them for additional consultations.
NEC at the end of its 145th monthly meeting on Thursday called on President Tinubu to withdraw the bills from the National Assembly and subject them to further consultations, a call that followed the displeasure of the Northern Governors Forum with some provisions of the bills.
At a meeting on October 28, 2024, Governors of the 19 Northern States, under the platform of the Northern Governors’ Forum, rejected the new derivation-based model for Value-Added Tax distribution in the new tax reform bills before the National Assembly.
A communiqué read by the Chairman of the forum, Governor Muhammed Yahaya of Gombe State, said the proposition negates the interest of the North and other sub-nationals.
However, reacting to the advice by NEC, President Tinubu, in a statement on Friday by his Special Adviser on Information and Strategy, Bayo Onanuga, expressed gratitude to the NEC, led by Vice President Kashim Shettima and the 36 State Governors, for their input but urged that the legislative process continue, allowing for public hearings and further stakeholder engagement.
Tinubu emphasised the importance of the ongoing legislative process in enabling public input and adjustments, reiterating his administration’s dedication to improving Nigeria’s tax system.
The statement recalled that the President established the Presidential Committee on Tax and Fiscal Policy Reform in August 2023 to advance economic productivity and create a more business-friendly environment.
The committee’s work involved more than a year of consultations across the country, gathering input from diverse groups, including trade associations, professional organizations, government agencies, and the organized private sector.
The proposed tax reforms, crafted from the committee’s findings, include four key bills: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board Establishment Bill.
These bills, according to the statement, aim to streamline Nigeria’s tax administration, reduce complexity, and align processes with international standards.
A central goal of the reforms is to eliminate the inefficiencies and overlapping responsibilities that have historically hampered Nigeria’s tax operations.
Key highlights of the bills include measures to simplify tax obligations, unify Federal, State, and local tax processes and establish a Joint Revenue Board with a dedicated Office of Tax Ombudsman.
The reforms also propose consolidating several taxes, such as Company Income Tax, Personal Income Tax, Capital Gains Tax, and Value-Added Tax, into a single, integrated structure to minimize administrative burdens and enhance compliance.
The statement further said while the NEC’s recommendations reflect a desire for additional consultation, President Tinubu remains focused on passing legislation that will modernize Nigeria’s tax framework and address systemic issues in tax administration, underscoring his openness to continued engagement with stakeholders throughout the legislative process, emphasizing that constructive revisions to the bills can still be made as they undergo parliamentary scrutiny.
“President Bola Tinubu has received the National Economic Council’s recommendation that the tax reform bills already sent to the National Assembly be withdrawn for further consultation.
“President Tinubu commends the National Economic Council members, especially Vice President Kashim Shettima and the 36 State Governors, for their advice.
“He believes that the legislative process, which has already begun, provides an opportunity for inputs and necessary changes without withdrawing the bills from the National Assembly.
“While urging the NEC to allow the process to take its full course, President Tinubu welcomes further consultations and engagement with key stakeholders to address any reservations about the bills while the National Assembly considers them for passage.
“When President Tinubu set up the Presidential Committee on Tax and Fiscal Policy Reform in August 2023, he had only one objective: to reposition the economy for better productivity and efficiency and make the operating environment for investment and businesses more conducive. This objective remains more critical even today than ever before.
“The Committee worked for over a year and receive inputs from various segments of society across the geopolitical zones, including trade associations, professional bodies, different Ministries and Government Agencies, Governors, traders, students, business owners, and the organised private sector.
“The tax reform bills that emerged were distilled from the extensive work of the Presidential Committee.
“The tax bills before the National Assembly aim to streamline Nigeria’s tax administration processes, completely overhaul the nation’s tax operations, and align them with global best practices.
“Below are the major highlights of the four Bills; 1. The Nigeria Tax Bill: This Bill seeks to eliminate multiple-taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.
“2. The Nigeria Tax Administration Bill (NTAB): This Bill proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions to ease taxpayers’ compliance and enhance the revenue for all tiers of government.
“3. The Nigeria Revenue Service (Establishment) Bill: The Bill seeks to re-establish the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect its mandate as the revenue agency for the entire federation, not just the Federal Government.
“4. The Joint Revenue Board Establishment Bill: This Bill proposes creating a Joint Revenue Board to replace the Joint Tax Board, covering federal and all state tax authorities. The fourth bill will also establish the Office of Tax Ombudsman under the Joint Revenue Board, protecting taxpayers’ interests and facilitating dispute resolution.
“The bills’ overarching objective is to effectively coordinate federal, state, and local tax authorities, thereby eliminating the overlapping responsibilities, confusion, and inefficiency that have plagued tax administration in Nigeria for decades.
“Under existing laws, taxes like Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), Value-Added Tax (VAT), and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.
“The proposed reforms seek to consolidate these numerous taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.
“While there may be differences in approach or specific provisions of the new tax bills, what is not in contention is the need to review our tax laws and how we administer them to serve our overall national development agenda.
“President Tinubu will continue to respect and welcome the advice and recommendations of the National Economic Council, an essential constitutional organ of government on economic matters,” the statement reads.
