The House of Representatives has given its approval to the Tax Reform Bills submitted by President Bola Tinubu, following the consideration and adoption of the report from the House Committee on Finance.
The Chairman of the Committee, Hon. James Faleke, presented the report during a plenary session on Thursday, leading to its swift approval.
In a related development, Hon. Faleke reassured Nigerians that the tax reform bills would lead to laws that are both fair and beneficial to all citizens.
Speaking to journalists in Abuja after the House adopted the report on the four tax reform bills, he highlighted that extensive consultations were conducted prior to finalizing the bills.
The four bills in question are: the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill. These bills were first read on October 8, 2024. However, debates on the bills were suspended after they sparked controversy, particularly among Northern lawmakers who opposed the proposed sharing formula for the Value Added Tax.
The discussions became a point of contention between Northern and Southern lawmakers. The National Economic Council, which includes the governors and is chaired by Vice President Kashim Shettima, had advised the president to withdraw the bills for further consultations. Despite this, President Tinubu remained firm in his stance, insisting that all concerns be addressed within the National Assembly.
Following the consideration of the bills by the House, they are now set to proceed to the third reading before their eventual passage. Hon. Faleke revealed that during a six-day retreat, all contentious areas of the bills were thoroughly addressed by the committee.
Regarding the Nigeria Revenue Service Bill, the committee recommended that a representative from each of Nigeria’s 36 states should be selected to sit on the Board. Additionally, the power of the Service to distrain should only be exercised with a valid court order. Concerns regarding the bill’s definition of “tax,” which could potentially overlap with the revenue collection duties of other agencies like the Nigeria Customs Service, were also resolved.
For the Nigeria Tax Administration Bill, the committee suggested that the Joint Revenue Board create uniform guidelines for accrediting tax agents, with certification from the Chartered Institute of Taxation of Nigeria. The committee also recommended removing provisions that relate to State Revenue Service and Local Government Tax Boards, citing these as exceeding the National Assembly’s constitutional powers.
Other key recommendations included placing limits on the president’s powers to exempt or waive taxes, establishing clear guidelines for the attribution and derivation of VAT revenue, and introducing phased implementation for VAT fiscalisation. The committee also called for further consultations to achieve an equitable VAT sharing formula.
The committee proposed that the tenure and retirement age of the Secretary to the Tax Appeal Tribunal be revised, and that the newly created Office of the Ombud to the Tribunal be abolished, as it would lead to unnecessary costs and overlapping jurisdictions.
On the Nigeria Tax Bill, it was suggested that the term “ecclesiastical” be replaced with “religious” to ensure inclusivity across all faiths. The committee also recommended the deletion of a proposed inheritance tax, which they argued infringed on religious laws, particularly in the North and South where inheritance matters fall under Sharia and Customary Law, respectively.
Additionally, the committee proposed reducing the VAT rate to 5%, or alternatively, maintaining the current 7.5% rate. They also recommended reinstating contributions to the National Agency for Science and Engineering Infrastructure (NASENI) and the National Information Technology Development Agency (NITDA), while ensuring continued funding from the Development Levy.
Hon. Faleke expressed satisfaction with the House’s approval of the committee’s recommendations and acknowledged the efforts of Speaker Tajudeen Abbas and other lawmakers in ensuring that the bills serve the collective interests of all Nigerians. He also praised President Tinubu for recognizing the need to update Nigeria’s tax laws, some of which date back to 1959, emphasizing that outdated policies must be revised to meet the country’s current economic needs.
The Deputy Chairman of the Committee, Hon. Saidu Abdullahi (APC-Niger), described the tax reform bills as among the most debated in the 10th Assembly. He noted that despite initial disagreements, a consensus was reached after extensive stakeholder engagement.
