Tinubu’s tax reform bills pass second reading in Senate
By Jeffrey Agbo
The Senate has approved the second reading of four tax reform bills proposed by President Bola Tinubu, marking a significant step in the administration’s fiscal reform agenda.
The proposed bills aim to revise the sharing formula for Value Added Tax (VAT), ensuring states receive a larger share based on consumption within their territories. Additionally, they seek to exempt essential goods and services such as education, healthcare, transportation, and accommodation from VAT to ease the financial burden on low-income earners.
Sponsored by Senate Leader Opeyemi Bamidele, the bills have now been referred to the Senate Committee on Finance for further deliberation.
Senate President Godswill Akpabio directed the committee to submit its report within six weeks, emphasising the importance of involving stakeholders such as the National Economic Council (NEC), the Nigerian Governors’ Forum (NGF) and civil society organisations during the public hearings.
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The approval follows an appearance by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who briefed lawmakers on the bills’ objectives. Oyedele highlighted that the reforms aim to alleviate the tax burden on 90% of Nigerian workers.
The four bills—Nigeria Tax Bill 2024, Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill—were submitted to the National Assembly two months ago. One notable proposal is the reduction of the federal government’s VAT share from 15% to 10%, with state allocations adjusted to incorporate the derivation principle.
The bills, however, have sparked criticism. The Northern Governors Forum expressed concerns over the VAT provisions, arguing they could disadvantage the region.
Consequently, the forum urged northern lawmakers to oppose the bills. Similarly, the NEC, chaired by Vice President Kashim Shettima, advised the president to reconsider the proposals. Despite these objections, President Tinubu has maintained that any disagreements should be addressed through parliamentary debate.