President Bola Tinubu’s recent submission of four executive tax reform bills to the National Assembly has sparked a heated debate. Central to the controversy is Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), whose clarifications on the reforms have yet to clear the air but intensified discussions.
At first glance, the four bills appear to serve distinct purposes: The Nigeria Tax Bill seeks to harmonize various tax laws to reduce multiplicity; the Nigeria Tax Administration Bill focuses on standardizing tax processes and compliance requirements; the Nigeria Revenue Service Bill aims to replace the FIRS Act and establish a National Revenue Service (NRS) to collect domestic and international revenues; and the Joint Revenue Board Bill will create a framework for resolving revenue conflicts between states and local governments.
A key aspect of these proposals involves replacing the FIRS with the NRS, which would become a central and most powerful revenue service in the country. The NRS will be the only agency responsible for collecting all government revenues, including those currently managed by other agencies in oil, customs, port, and other sectors. It will be more powerful and influential than the Central Bank of Nigeria (CBN) and Nigerian National Petroleum Company (NNPC) and others.
Another contentious point is the proposed Value Added Tax (VAT) distribution model. Under the new framework, states receiving VAT collections would retain significant revenue. However, some northern leaders fear this model will disproportionately benefit states where companies are headquartered rather than those where goods and services are consumed.
In a statement from Gombe State Governor Muhammad Inuwa Yahaya (Chairman of the Northern Governors Forum), northern governors oppose the proposed derivation-based VAT distribution model, citing concerns that it would disadvantage their states. They reaffirmed their commitment to national development while emphasizing the need for equity in policy implementation to prevent any geopolitical zone from feeling marginalized.
The governors urged federal legislators to reject any legislation perceived as unfavorable to any region. The communiqué stated: “The Forum is concerned by the recent Tax Reform Bill sent to the National Assembly, especially the proposed shift to a derivation-based VAT distribution model, which disadvantages the North.”
Consequently, the next day, the National Economic Council (NEC), chaired by Vice President Kashim Shettima, recommended President Tinubu withdraw the Tax Reform Bills from the National Assembly. In attendance at the 144th NEC meeting, which was held at the State House in Abuja, were governors and Federal Executive Council (FEC) members, including Finance Minister Wale Edun and Budget and National Planning Minister Abubakar Bagudu.
Oyo State Governor Seyi Makinde remarked that the council recognized the necessity for further understanding and alignment on the bills, stressing that more comprehensive consultations would be in the nation’s best interest.
Despite this recommendation by governors and federal cabinet members in NEC, President Tinubu said he would not withdraw the proposed tax reform bills. His spokesperson, Bayo Onanuga, indicated that the president believes the legislative process should continue, allowing room for input and adjustments through public hearings. Tinubu remains committed to reforming Nigeria’s tax system, he assured.
Through the proposed bills, the government aims to streamline tax administration, enhance efficiency, and align with global best practices. The bills—the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board Establishment Bill—seek to unify tax processes, reduce overlapping responsibilities, and simplify compliance for businesses and individuals.
It is widely believed that the FIRS Chairman Zacch Adedeji is the driving force behind these reform proposals. His educational background, prior positions, and current role have established him as one of the most influential figures in the Tinubu administration. Born on January 8, 1978, in Ogbomosho, Oyo State, Adedeji graduated with first-class honors in Accountancy from Obafemi Awolowo University (OAU), Ile-Ife, where he also obtained his Master’s and PhD in the same field.
Adedeji’s professional journey started at Procter & Gamble (P&G) as Corporate Finance Manager for West Africa and later as Finance Leader for SAP Implementation. He also served as Finance Commissioner in Oyo State under Governor Isiaka Ajimobi (2011–2015) and was appointed Executive Secretary of the National Sugar Development Council (NSDC) by President Muhammadu Buhari before becoming the FIRS Chairman under President Tinubu.
While his political ambition is fuzzy—having avoided any major controversy—some suspect his positions on tax reform and proposed legislation harbor hidden agendas. In light of these concerns, he proactively engaged with members of the National Assembly following the submission of the bills. He addressed both the Senate Committee on Finance, chaired by Senator Sani Musa, and the House of Representatives Committee, led by Hon. James Faleke.
Adedeji articulated the reforms’ goals, highlighting the need to balance existing tax laws, streamline administration, and align Nigeria’s tax system with global standards. Noting that the reforms aim to enhance transparency and improve efficiency in revenue collection, he said the changes would adapt to the realities of the digital economy and position the country attractively for investment. Adedeji confirmed that no additional taxes would be introduced in line with President Tinubu’s commitment to “not taxing poverty and inflation.”
However, until the full details of the tax reform bills are released to the general public, speculations will undoubtedly continue. The discrepancy between President Tinubu’s stance and Vice President Shettima-led NEC’s recommendation only adds to the confusion.
The contradiction between the FEC and the NEC is indeed puzzling, especially considering the All Progressive Congress (APC) controls governance at the national level and in many states. A unified and diplomatic approach would have been more effective in addressing the tax reform proposals unless the drama was a deliberate script for political purposes.
As the debate continues, Adedeji’s true intentions and the broader impact of these reforms on Nigeria’s economy remain in question. The outcome will shape the nation’s economic trajectory.
Yushau Shuaib is the publisher of PRNigeria & Economic Confidential
The tax reform bills of the Federal Government have been hotly debated in recent times with opinions divided as to the propriety or otherwise of what is seen in some quarters as a necessity of some sorts. IBRAHIM APEKHADE YUSUF in this report examines the pros and cons of the raging debates.
With the benefit of hindsight The Nation can authoritatively report that one of the objective principles enunciated in the manifesto of President Bola Ahmed Tinubu, during the hustings and electioneering campaigns was the need to reform the nation’s tax system.
Omooba Olumuyiwa Sosanya, renowned tax expert who was privy to the drafting of the manifesto confided in our correspondent that what the Committee put together was actually a game changer of some sorts as far as the nation’s tax administration is concerned.
According to him, looking back now, it is not surprising that the debates over what our respondent described as a well-thought out policy brief is being queried by individuals who should know better.
While ventilating his views on the raging debates over the controversy generated by the tax reform bills, he simply said it was of necessity especially given the fact that it was revolutionary given critical changes it was meant to bring and get the economy back on an even keel.
Crux of the matter
The Presidential Committee on Fiscal and Tax reforms headed by Taiwo Oyedele had recently presented a bill to the Federal Executive Council which was later approved and transmitted to the National Assembly for passage.
The committee saddled with the responsibility to harmonise multiple taxes and levies at all levels of government is also responsible for the unification of revenue collection functions as well as modernisation and simplification of the tax system, including the use of technology for revenue collection
The Oyedele-led committee is also responsible for transforming revenue generation for sustainable development to achieve at least 18% Tax to GDP ratio within the next three years, that is, by 2026
Subsequently, in early October 2024, President Bola Ahmed Tinubu transmitted the Nigeria Tax Bill 2024 to the National Assembly.
The bill is expected to reshape Nigeria’s fiscal framework and establish a comprehensive legal framework governing taxation of incomes, transactions, and instruments.
The bill is entitled, “An Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation and Enact the Nigeria Tax Act to Provide for Taxation of Income, Transactions and Instruments, and for Related Matters.”
The bill generated reactions from different quarters, including governors and traditional rulers of Northern Nigerian states who last Monday, unanimously resolved to reject it.
According to the northern governors, the contents of the proposed tax bill are not in tandem with the interests of the North and other sub-national entities.
Expectedly, on Thursday, The National Economic Council recommended the withdrawal of the bill.
Highlights of the bill
Increase in VAT
Section 146 of the bill seeks to raise the value added tax (VAT) from 7.5 per cent to 10 per cent by 2025, with further increases to 12.5 per cent from 2026 to 2029, and 15 per cent from 2030 onwards.
In this case, the value of taxable supplies includes the total consideration plus VAT for monetary transactions or the market value for non-monetary transactions. However, in cases where the transaction is part of a larger arrangement, only the relevant portion will be taxable.
Also, on transactions between related parties or those involving non-monetary exchanges, the taxable value is to be determined by the equivalent market value.
Similarly, VAT collected by a taxable person will be called output VAT. Government bodies (federal, state, and local), their ministries, departments, agencies, and other designated agents are required to collect or withhold VAT and remit it to the tax authority as prescribed.
VAT exclusions
Also contained in the bill is the provision for certain supplies to be exempt from the proposed VAT.
These supplies include: oil and gas exports, crude petroleum oil, and feed gas. Other exempt items are: goods purchased for humanitarian projects (where the donor pays VAT upfront), baby products, locally manufactured sanitary products, military hardware and arms, and ammunition supplied to security agencies.
Also, electricity generated by generation companies (GENCOs) and supplied to the national grid or to the Nigeria Bulk Electricity Trading Company (NBET) will be exempt, along with electricity transmitted by the Transmission Company of Nigeria (TCN) to electricity distribution companies (DISCOs).
27.5% company income tax
Section 56 of the bill outlines tax rates to be imposed on the total profits of companies, with small firms taxed at 0 per cent. All other companies will face a tax rate of 27.5 per cent in 2025, which will reduce to 25 per cent from 2026. If a company’s effective tax rate is less than 15 per cent in any assessment year, it must re-compute and pay an additional tax to bring it up to the 15 per cent threshold.
This provision applies to companies within multinational enterprise groups and any company with an aggregate turnover exceeding N20 billion in the relevant year.
4% development levy on companies
Section 59 stipulates a development levy on the assessable profits of companies, excluding small and non-resident companies. The levy is set to be four per cent for 2025 and 2026, three per cent from 2027 to 2029, and two per cent from 2030 onwards. The levy will fund the Student Education Loan Fund.
The revenue will be distributed to the Tertiary Education Trust Fund which will receive 50 per cent in 2025 and 2026, 66 per cent from 2027 to 2029, and zero per cent from 2030 onwards.
The Student Education Loan Fund will receive 25 per cent in 2025 and 2026, 33 per cent from 2027 to 2029, and 100 per cent from 2030 onwards.
Also, the National Information Technology Development Fund will receive 20 per cent in 2025 and 2026, and zero percent from 2027 onwards. The National Agency for Science and Engineering Infrastructure will receive 5 per cent in 2025 and 2026, and zero percent from 2027 onwards.
5% excise tax on lottery and gaming income
Section 62 and Schedule 10 of the law propose 5 per cent excise duty on revenue of lottery and gaming trade or business.
It described ‘Gaming’ as gambling, wagering, video poker, roulette, craps, bingo, slot or gaming machine, drawings or other games of chance conducted by any person.
It also described ‘Lottery’ or ‘Lotteries’ as any betting, game, scheme, arrangement, system, plan, promotional competition or device for the distribution of prizes by lot or chance, or as a result of the exercise of skill and chance, or based on the outcome of real or virtual sporting events, or any other game, scheme, arrangement, system, plan, competition or device.
5% telecoms tax
In the same vein, the bill had proposed a five per cent excise duty on telecommunications services, including postpaid and prepaid services regulated by the Nigerian Communications Commission (NCC).
The Presidency reacts
President Bola Tinubu on Friday, reacted to the National Economic Council’s (NEC) recommendation during its meeting on Thursday at the State House, Abuja, that the four tax reform bills already sent to the National Assembly be withdrawn for further consultation.
The President, according to a statement issued by his Adviser on Information and Strategy, Bayo Onanuga, while commending the NEC members, especially Vice President Kashim Shettima and the 36 State Governors, for their advice, however, believed that the legislative process, which has already begun, provides an opportunity for inputs and necessary changes without withdrawing the bills from the National Assembly.
The development emerged as a notable Northern group, the Arewa Think Tank (ATT) threw its weight behind the tax reform bill before the National Assembly, insisting that it was not targeted at the 19 northern States, as being wrongly speculated in the north.
The four bills are the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill and the Joint Revenue Board Establishment Bill.
While urging the NEC to allow the process to take its full course, Tinubu in the statement, welcomed further consultations and engagement with key stakeholders to address any reservations about the bills while the National Assembly considers them for passage.
The statement further explained that when 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, it stressed, remains more critical even today than ever before.
The Committee worked for over a year and received 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.
Onanuga also listed major highlights of the four Bills to include: 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.
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.
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.
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, the release stated, 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 the tax laws and how we administer them to serve the nation’s overall national development agenda.
The statement further pointed out that Tinubu would continue to respect and welcome the advice and recommendations of NEC, an essential constitutional organ of government on economic matters.
Groundswell of support for tax reforms
As you would expect not many are opposed outright to the reforms and for good measure too. One of such ardent believers in the reform is the Arewa Think Tank (ATT) has thrown its weight behind the Tax Reform Bill before the National Assembly.
In a statement, the Convener of ATT, Muhammad Alhaji Yakubu, said his group aligned with Tinubu on the Reforms, while urging for further wider consultation to build a consensus around the Reforms.
“It is unfortunate that wrong speculations are going around that the Reform is against the north.
We wish to disagree that the tax reform bill before the National Assembly is targeted at the 19 northern States.
“We are calling on the governors of the 19 Northern states to go back to the drawing board to have a rethink over their outright rejection of the bill, especially the proposed amendment to the distribution of Value Added Tax (VAT) to a derivation-based model.
“We believe that, as stated in the bill, it is designed to create a fairer system that will benefit all the States across the country.
“We know that the ongoing tax reform seeks to correct the inequity in the current derivation model as a basis for distributing VAT revenue.
“We commend the Northern governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we however, consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by Tinubu’s administration.
“We are of the knowledge that the new policy initiatives are aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.
“We also know that the reforms being proposed are critical to improving the lives of Nigerians and are not proposed by President Tinubu to undermine any part of the country,” the statement added.
On the issue of conspiracy theories around the power outage in the north, the group said the negative insinuations were the handwork of some Nigerians with ulterior motives to pitch Tinubu’s administration against northern interests.
“If truly the federal government wants to cripple the North, will it be looking for a loan to complete Maradi-Kano rail lines, which is of immense economic benefit to the North?
“If it is true that Tinubu wants to cripple the economic activities of the North, let’s look at the student loan; statistics have shown that the majority of the beneficiaries of that loan are northern students.
“And look at the Almajiri Commission that Mr. President is funding properly now. Who are the beneficiaries? It is the Northerners.
“We are appealing to some disgruntled politicians not to politicize this power outage. Where President Tinubu deserves kudos, we should give him kudos.
“If there are issues, especially those who have access to him, they should meet him and trash out issues. We should not politicise everything.
“The North is benefiting from the government of President Tinubu. We should give him kudos. We are still appealing for more time for him. By May next year, if God spares our lives, we can give an objective assessment of his government so far.”
In the view of Former President of the Chartered Institute of Bankers of Nigeria (CIBN), Mr. Okechukwu Unegbu, also backed the proposed tax policy, suggesting it should be extended to top corporate executives and individuals with extravagant lifestyles who lack a clear justification for their wealth.
“The government’s decision is sound, but it should also include Pentecostal clergy, many of whom live in excessive affluence while the economy struggles,” Unegbu said.
He further stressed the need for the federal government to exercise prudence in managing public funds, ensuring that the additional revenue generated from the new tax policy is used efficiently for the benefit of all Nigerians.
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.
