The signing ceremony took place at the Presidential Villa, Abuja, with key national figures in attendance, including the Senate President, House Speaker, principal officers of both chambers, state governors, and senior federal government officials.

The Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill—were passed by the National Assembly following extensive stakeholder consultations across sectors.

President Tinubu described the laws as central to building “a modern, transparent, and efficient tax system that supports inclusive national development, promotes investment, and eliminates the burden of multiple taxation.”

Breakdown of the Reforms:

Nigeria Tax Bill (Ease of Doing Business): Consolidates various tax statutes into a single framework, aimed at reducing duplication and simplifying compliance for businesses and individuals.

Nigeria Tax Administration Bill: Establishes a unified structure for tax operations across federal, state, and local governments, promoting harmonized and efficient tax practices nationwide.

Nigeria Revenue Service (Establishment) Bill: Replaces the Federal Inland Revenue Service (FIRS) with a new, performance-driven Nigeria Revenue Service (NRS) empowered to collect both tax and non-tax revenues. It introduces mechanisms to boost transparency and accountability.

Joint Revenue Board (Establishment) Bill: Sets up a coordinating body to align tax collection efforts across all tiers of government. It also creates a Tax Appeal Tribunal and an Office of the Tax Ombudsman to safeguard taxpayer rights and strengthen dispute resolution.

Analysts and stakeholders have hailed the reforms as a critical step toward boosting investor confidence, enhancing government revenue, and ensuring a fairer tax environment for Nigerians. The bills are also expected to spur job creation, improve public service delivery, and support Nigeria’s economic recovery efforts.

The reforms are part of Tinubu’s broader economic strategy to stabilize the macroeconomy, attract investments, and lay the groundwork for long-term growth through effective governance and fiscal discipline.

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Following a closed-door deliberation lasting over two hours, the red chamber ratified recommendations from its finance panel, chaired by a key northern legislator. The measures now move to the lower legislative house and require executive authorization before they become enforceable instruments.

One of the approved policies introduces a new basis for allocating proceeds from value-added economic activities, replacing prior location-based criteria with end-user consumption as the determinant. Under this model, central authorities will retain a 10% share, sub-national entities will receive 55%, and grassroots administrations are assigned 35%. Among regional governments, distribution will consider equal share (50%), population size (20%), and location of end-use (30%), while the grassroots tier follows a slightly adjusted formula. A proposed reduction in collection fees from 4% to 2%—including revenue derived from extractive sectors—was accepted during deliberations.

The second measure formalizes the reconstitution of the primary revenue entity, appointing the national chief executive as chair of its supervisory board, with a Senate-approved deputy leading operational affairs. The structure includes regional representation, ensuring a spread of appointments across the country’s six major zones, with safeguards against dual appointments from any single state.

Expanded mandates for the restructured entity include overseeing corporate levies, driving policy modernization, and pursuing illicit financial activities linked to non-compliance. The proposal sets financial and custodial penalties for failure to register, declare earnings, or maintain accurate records, with fines ranging from tens of thousands of naira to potential imprisonment.

Presiding officers of the chamber praised the process and those who mediated disputes, asserting that the final framework was shaped by consensus rather than sectional interests. One senior figure noted that a special internal committee played a pivotal role in reconciling early disagreements, paving the way for broad legislative alignment.

Two additional components of the fiscal reform package are scheduled for review during the next plenary session.

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Speaking in Ado Ekiti during an empowerment event, Bamidele described the bills as “game changers” that would ease tax burdens for low-income earners and exempt small businesses.

He also reaffirmed that the review of the 1999 Constitution is ongoing, aiming to improve governance efficiency and attract foreign investments.

The Senate has passed key legislation, including amendments to the National Social Investment Programme Act and the Nigeria Data Protection Act, to strengthen institutions and boost economic growth.

Bamidele emphasized that these reforms will enhance revenue generation, improve living conditions, and stabilize Nigeria’s economy.

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Speaking at a Zoom dialogue meeting in Abuja, Finance Minister Wale Edun said the tax adjustment would build on last year’s 20% revenue increase.

Economic Stability and Growth Sectors
Edun stated that Nigeria’s economy had achieved relative stability over the past 18 to 20 months.

He highlighted agriculture, housing, and infrastructure as key drivers of economic growth in 2024.

The government plans to enhance agricultural productivity through improved dry and wet season farming techniques.

To address the housing deficit, a 25-year low-interest mortgage scheme with single or low double-digit rates will be introduced.

For infrastructure, the Highways Management and Development Initiative (HMDI) will facilitate major highway concessions, citing the Benin-Asaba Highway as a successful privately funded project.

Debt Management and Revenue Expansion
The minister emphasized a shift from concessional and bilateral financing to cheaper funding options, including domestic bond issuance.

Over N700 billion in bonds have been issued to clear pension arrears, reaffirming the government’s commitment to resolving legacy pension debt.

Despite Nigeria’s reliance on oil revenue, Edun stressed efforts to maximize fossil fuel revenue while promoting public-private partnerships (PPPs) and privatization to boost investment.

Economic Indicators Moving in the Right Direction
Reflecting on economic performance, Edun noted that Nigeria narrowly avoided collapse at the start of the Tinubu administration, surviving on illegally borrowed central bank funds.

He reported a 3.84% GDP growth rate in the last quarter of 2024, aligning with the annual 3.4% target.

Inflation is declining, dropping by 1.3 percentage points between January and February, while food prices, energy costs, and exchange rate stability are positively impacting living costs.

Government revenues increased by 20% in 2024, reducing the budget deficit and debt servicing burden.

Future Outlook
Edun assured that all economic indicators were improving, and the government remained focused on stabilization and attracting private investment.

He also highlighted the role of technology in boosting revenue generation from government-owned enterprises.

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Recall that the House had on Thursday last week, considered and approved the report of the House Committee on Finance which made some recommendations, particularly in controversial areas such as the Value Added Tax and inheritance tax.

While awaiting the Senate to similarly pass the bills, the proposed reforms are expected to be transmitted to the President for his assent in the days ahead.

Details shortly…

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During plenary, Committee Chairman Rep. James Abiodun Faleke presented reports on the consolidated tax reform bills for further legislative review.

The bills aim to enhance revenue collection, improve tax administration, and restructure Nigeria’s fiscal policies for sustainable economic development.

Key Changes and Modifications

VAT Rate Retained at 7.5%

The committee rejected the proposed VAT increase, ensuring the current 7.5% rate remains unchanged for the foreseeable future.

Modification of Inheritance Tax

Only heirs investing inherited assets in income-generating businesses will be taxed on returns, not the inherited estates.

TETFUND, NITDA, and NASENI to Continue Operations

The proposed discontinuation of funding for these agencies by 2030 has been reversed by the House Finance Committee.

Tax Collection and Revenue Sharing Adjustments

The VAT derivation formula now prioritizes consumption-based attribution rather than revenue allocation based on company headquarters.

Taxable persons must submit VAT returns by the 21st of every month, regardless of business activity levels.

Fiscalisation and Digital Tax Compliance

The Federal Inland Revenue Service (FIRS) will determine and implement a phased transition for electronic tax reporting systems.

Addressing Stakeholder Concerns

Rep. Bappah Aliyu Misau confirmed that over 90% of contentious issues raised during public hearings have been addressed effectively.

Lawmakers from the North initially opposed specific provisions, but consensus was reached after extensive negotiations and deliberations.

Red Flags and Remaining Concerns

Despite modifications, concerns persist regarding provisions granting excessive powers to the presidency and tax authorities nationwide.

• Presidential Tax Exemptions: Section 75 allows the president to exempt any company from income tax at personal discretion.
• Asset Seizure Without Court Approval: Section 60 empowers tax authorities to seize and sell assets within 14 days.
• Expanded Surveillance Powers: Authorities can investigate individuals based on lifestyle assessments, raising fears of political misuse.

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The Senate has affirmed that proposed Tax Reform Bills will significantly contribute to Nigeria’s $1 trillion economy goal.

Senator Sani Musa, Chairman of the Senate Committee on Finance, disclosed this on Tuesday while addressing reporters in Abuja.

He revealed that the committee would soon organize a three-day retreat to review stakeholder memoranda submitted on the bills.

The retreat aims to assess submissions thoroughly, ensuring the reforms align with national economic growth objectives and public interests.

Meanwhile, Senator Abdul Ningi, Chairman of the Senate Committee on Sports, noted the bills have gained national significance.

Initially opposed to the reforms, Ningi acknowledged state governors’ interventions helped facilitate the ongoing public hearing process.

He emphasized that critical stakeholders now have opportunities to share opinions, contributing meaningfully to the legislative process.

The Senate reiterated its commitment to ensuring tax reforms promote sustainable economic growth, benefiting all Nigerians equitably.

The Tax Reform Bills are expected to enhance revenue generation, support development, and strengthen Nigeria’s overall fiscal framework.

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He made this statement during a public hearing on the Tax Reform Bills. Akpabio argued that despite low tax compliance, citizens continue to demand improved infrastructure and public services.

His remarks have drawn strong criticism from major labour unions and economic stakeholders.

Labour Unions Dispute Akpabio’s Claims

The Nigeria Labour Congress (NLC), Trade Union Congress (TUC), and the Nigeria Employers’ Consultative Association (NECA) have all rejected Akpabio’s assertion. They blame government inefficiency and lack of transparency for the country’s tax challenges.

Dr. Tommy Okon, Deputy President of TUC, dismissed Akpabio’s statistics, questioning the accuracy of his data. He pointed out that if tax compliance were truly low, the Federal Inland Revenue Service (FIRS) would not consistently exceed its revenue targets.

Okon emphasized that workers do not evade taxes because deductions are made directly from their salaries. Instead, he argued, wealthy individuals exploit loopholes to avoid taxation.

NECA Blames Government for Tax Avoidance

Adewale-Smatt Oyerinde, Director-General of NECA, also weighed in on the issue. He acknowledged that tax compliance in Nigeria is low but placed the blame on the government.

He argued that Nigerians see little benefit from their taxes, making them reluctant to comply. According to him, without proper accountability and transparency, tax reforms will not change public perception.

Tax Reform Bills Under Scrutiny

The Tax Reform Bills, sent by President Bola Tinubu to the Senate and House of Representatives on October 3, 2024, have fueled intense debates on Nigeria’s fiscal policies.

The proposed laws include:

• Nigeria Tax Bill (NTB) 2024
• Nigeria Tax Administration Bill (NTAB) 2024
• Nigeria Revenue Service (Establishment) Bill (NRSEB) 2024
• Joint Revenue Board (Establishment) Bill (JRBEB) 2024

Senator Sani Musa, Chairman of the Senate Committee on Finance, revealed that Tinubu urged lawmakers to create “workable laws” that will boost economic growth and improve fiscal stability.

Economic Stakeholders Support Tax Reforms

Despite opposition from labour unions, some economic bodies have expressed support for the tax reforms.

Organizations backing the bills include:

• Nigerian National Petroleum Company Limited (NNPCL)
• Revenue Mobilisation and Fiscal Allocation Commission (RMFAC)
• National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA)
• Institute of Chartered Accountants of Nigeria (ICAN)

Mele Kyari, Group CEO of NNPCL, described the reforms as a “game-changer” for the oil and gas industry. He believes the new laws will simplify Nigeria’s tax system.

Similarly, Dr. Mohammed Shehu, Chairman of RMFAC, called for fair revenue distribution among states. He emphasized that tax revenues should benefit the regions that generate them.

Akpabio Defends Tax Reforms

Akpabio has responded to the criticism, addressing social media misinformation about the bills. He urged Nigerians to engage with the legislative process instead of forming opinions based on online debates.

He also pointed out the inequitable tax distribution in Nigeria. Using an example, he explained that if a brewery operates in Ogun State but has its headquarters in Lagos, the tax revenue is collected in Lagos. This, he argued, creates an unfair system where host states receive little benefit.

The Tax Reform Debate Continues

As discussions over tax compliance, revenue distribution, and government accountability continue, Nigeria finds itself at a critical crossroads.

Labour unions, businesses, and lawmakers all seek a tax system that aligns with their interests. Whether these reforms will bring real economic change or remain another contested policy remains to be seen.

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President Bola Tinubu forwarded the bills to the National Assembly on October 3, 2024, for consideration.

The reform package includes Nigeria Tax Bill, Tax Administration Bill, Revenue Service Bill, and Joint Revenue Board Bill.

After passing a second reading on November 28, 2024, the Senate referred the bills to the Finance Committee.

Senator Mohammed Sani Musa, committee chairman, said extensive stakeholder consultations preceded the planned public hearing.

Discussions on Monday will focus on the Revenue Service Bill and Joint Revenue Board Establishment Bill.

On Tuesday, the Tax Administration Bill and Nigeria Tax Bill will undergo review by the Senate Finance Committee.

Key stakeholders, including Finance Minister Wale Edun and Attorney General Lateef Fagbemi, are expected to attend.

Also invited are Federal Inland Revenue Service Chairman Zacch Adedeji and Statistician General Prince Adeyemi Adeniran.

Additional participants include the Ministers of Petroleum, Trade, and Investment, alongside 71 stakeholder groups.

Senator Musa emphasized the bills’ objective: boosting government revenue to fund infrastructure, education, and agriculture effectively.

He assured that prior stakeholder engagements would ensure the hearing addresses any unresolved issues efficiently.

Senator Musa reiterated President Tinubu’s commitment to respecting the legislative process without executive interference.

“Our mission is enacting laws positioning Nigeria on a prosperous economic path,” Musa declared confidently.

The committee also met Ministry of Finance Incorporated officials, requesting the comprehensive National Assets Register.

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Legislative work on the bills had been suspended since November 30, 2024, following strong opposition from lawmakers, particularly from the North, who argued that certain provisions were detrimental to their region’s interests.

Northern Caucus Vows Close Scrutiny

Despite the recent endorsement of a revised version of the bills by the Nigeria Governors Forum (NGF), northern lawmakers have vowed to scrutinize the proposed legislation to ensure that no “toxic” provisions pass into law.

A lawmaker from the North West, who spoke on condition of anonymity, revealed that the Northern Caucus, including Speaker Abbas Tajudeen, held a meeting on Tuesday to strategize. The meeting was presided over by the Northern Caucus Chairman, Alhassan Ado Doguwa, and attended by zonal caucus leaders Ahmed Idris Wase (North Central), Mukhtar Betara (North East), and Sada Soli Jibia (North West).

“We will scrutinize every section of these bills from today’s debate through the public hearings and final passage to ensure that nothing harmful to our people is passed,” the lawmaker stated.

Key Modifications to the Bills

One of the major concerns that initially led to the suspension of debate was the proposed Value Added Tax (VAT) revenue-sharing formula. The original proposal allocated 60% of VAT revenue based on derivation, which would benefit states generating higher tax revenue, primarily in the South.

Following negotiations, the revised version of the bill now proposes:

• 30% of VAT revenue allocated based on derivation (down from 60%)
• 50% of VAT revenue shared equally among all states
• 20% of VAT revenue distributed based on population

This adjustment was seen as a compromise to address concerns from northern governors and lawmakers, who had previously rejected the 60% derivation-based allocation.

Background and Legislative Process

President Tinubu transmitted four tax reform bills to the National Assembly on September 3, 2024, following recommendations from the Taiwo Oyedele-led Presidential Committee on Fiscal Policy and Tax Reforms.

The bills include:

1. Nigeria Tax Bill 2024 – Establishing a fiscal framework for taxation in Nigeria.
2. Tax Administration Bill – Providing a clear legal framework for tax administration and reducing disputes.
3. Nigeria Revenue Service Establishment Bill – Repealing the Federal Inland Revenue Service Act and creating the Nigeria Revenue Service.
4. Joint Revenue Board Establishment Bill – Establishing a tax tribunal and a tax ombudsman.

Initially, debate on the bills was suspended in December to allow for broader consultations. However, following a consensus between the federal government and the NGF, the bills have been modified and reintroduced for consideration.

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