THE National Economic Council (NEC) has advised President Bola Tinubu to withdraw the proposed tax reform bills currently before the National Assembly.

The NEC cited the need for more consultations and consensus-building among Nigerians before the bills are transmitted to the National Assembly.

According to Oyo State Governor Seyi Makinde, who briefed newsmen after the meeting, on Thursday, October 31, the NEC acknowledged Nigeria’s underperformance in major revenue sources, including the tax-to-GDP ratio and other critical indicators.

The new tax framework is part of the government’s plan to increase non-oil revenue amid fiscal challenges.

Given the rapid expansion in the telecoms and betting sectors, authorities are seeking to broaden the nation’s revenue base.

Makinde noted that NEC agreed that more sensitisation on the bill would foster consensus building and help Nigerians have a better understanding of the bills.

“NEC noted the need for sufficient alignment on the proposed reforms and recommended the withdrawal of the tax reform bills,” he stated.

Makinde emphasised that broader discussions could help address miscommunication and misinformation surrounding the tax reform initiative. 

“So, Council, therefore, recommended the need to withdraw the bills currently before the National Assembly on tax reforms so that we can have wider consultations and also build consensus around these reforms for the benefit of the entire country, and also to give people…for them to know the vision and where we are moving the country in terms of tax reform because there’s really a lot of miscommunication, misinformation,” he said.

On October 20, The ICIR reported that the Federal Government, through one of the bills, proposed a five per cent excise duty on telecommunications services, gaming, and betting activities.

The bill, titled “A Bill for 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 the Taxation of Income, Transactions, and Instruments, and Related Matters,” is dated October 4, 2024.

However, it exempted baby products and locally manufactured sanitary towels from tax as part of the process to overhaul Nigeria’s tax framework.

An analysis of the proposed legislation conducted on Friday, October 18, revealed that it aimed to implement excise duties on services including telecommunications, gaming, gambling, lotteries, and betting in Nigeria.

A section of the bill read, “The amount of an excisable transaction is the amount chargeable for the service by the service provider, both in money or money’s worth.

“Services, including telecommunications, gaming, gambling, betting, and lotteries however described, provided in Nigeria shall be charged with duties of excise at the rates specified under the tenth schedule to this Act in a manner as may be prescribed by the service.”

According to the breakdown of the excise duty structure outlined in the bill, telecommunications services, including postpaid and prepaid services regulated by the Nigerian Communications Commission, will be subject to a five per cent duty. The same rate will apply to gaming, gambling, betting, and lottery services.

The bill also established guidelines for currency transactions, indicating that any variance between the current Central Bank of Nigeria exchange rate and the actual transaction rate would incur an excise duty.

The ICIR reported that stakeholders had observed a lack of clarity in the VAT reforms proposal, resulting in a lack of information that Nigerians could engage with, since no policy document could be referenced for public engagement.

Mustapha USMAN

Usman Mustapha is a solution journalist with International Centre for Investigative Reporting. You can easily reach him via: umustapha@icirnigeria.com. He tweets @UsmanMustapha_M