PRESIDENT Bola Tinubu has declined the National Economic Council’s (NEC) recommendation to withdraw the proposed tax reform bills from the National Assembly.
The president instead urged the council and other stakeholders to allow the legislative process to address any issues through public consultation and debate.
This response followed recommendations from the National Economic Council (NEC) to withdraw the proposed tax reform bills currently before the National Assembly.
According to a statement issued on Friday, November 1, by the president’s special adviser on information and strategy Bayo Onanuga, the president believes that the ongoing legislative process, including public hearings, provides ample room for necessary adjustments.
The statement also emphasised that the bills should remain in legislative proceedings, with input welcomed at various stages, rather than undergoing withdrawal.
The ICIR reports that 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.
However, NEC cited on Thursday, October 31, 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, the council acknowledged Nigeria’s underperformance in major revenue sources, including the tax-to-GDP ratio and other critical indicators.
Makinde also noted that NEC agreed that more sensitisation on the bill would foster consensus building and help Nigerians have a better understanding of the bills.
Meanwhile, acknowledging some points of contention, Tinubu stated that while diverse perspectives may exist, the urgency to realign Nigeria’s tax laws with global standards and foster national development takes precedence.
He reiterated that the reforms are intended to address longstanding inefficiencies and better equip Nigeria for economic growth.
Tinubu also assured that his administration would continue to welcome advice from the NEC and engage with stakeholders as the bills advance through the National Assembly.
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.
According to the statement on Friday, the bill seeks to eliminate multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.
While it also proposes new rules governing the administration of all taxes in the country, the bill is said to seek the re-establishment of 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 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 statement added.
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