Senate Passes Four Key Tax Reform Bills For Second Reading

The Senate has passed four tax reform bills introduced by President Bola Tinubu for second reading.

The bills were debated and passed following discussions led by Senate Majority Leader, Opeyemi Bamidele, on Thursday.

The four bills include the Nigeria Tax Bill 2024, which aims to establish a fiscal framework for taxation in the country. Also included is the Tax Administration Bill, designed to create a legal structure for taxes and help reduce tax-related disputes.

The Nigeria Revenue Service Establishment Bill seeks to replace the Federal Inland Revenue Service Act by creating a new body, the Nigeria Revenue Service. Lastly, the Joint Revenue Board Establishment Bill proposes the formation of a tax tribunal and a tax ombudsman.

During the debate, Bamidele emphasized that the reforms would simplify the tax system, reduce the tax burden on small businesses, and improve tax collection methods. He stated, “It will eliminate double taxation. In the area of tax exemption of salaries below the minimum wage, it is proposed that the state governments share 55 percent of VAT from 15 percent. There is a reasonable effort to establish core tax statutes in the bill.”

Senator Seriake Dickson, representing Bayelsa West, highlighted that Nigeria’s reliance on oil revenue had hindered the development of a solid tax system. He noted, “I am aware that some issues have been raised and that is legitimate. There is nothing wrong in saying that phone calls made in Sokoto are calculated and paid to those states. We should ensure that this is transparent.”

On the other hand, Senator Ali Ndume of Borno South suggested that the bills should be delayed for further review, citing concerns over timing and issues surrounding derivation and VAT. He said, “Reforms are necessary if we have to move forward. My problem is number one, timing. Number two, the issue of derivation and VAT. The constitution has to be amended for some of these provisions to be effected.”

However, Chief Whip Tahir Monguno disagreed with Ndume, arguing that the bills should not be withdrawn. Monguno pointed out that the bills could still be adjusted during the public hearing process. He stated, “These bills will reduce the tax burden on Nigerians.”

After the debates, Senate President Godswill Akpabio put the bills to a vote, and they were passed for further legislative action.

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