President Bola Tinubu has dismissed the National Economic Council’s (NEC) recommendation to retract four proposed tax reform bills currently under review by the National Assembly, emphasizing the importance of completing the legislative process.
In a statement from his Special Adviser on Information and Strategy, Bayo Onanuga, Tinubu highlighted that the legislative review already underway in the National Assembly should continue, allowing room for adjustments and contributions without the need to withdraw the bills.
This development follows the NEC’s advice, led by Vice President Kashim Shettima and supported by the 36 state governors, to pause the bills for further consultation with key stakeholders. Concerns from the Northern Governors’ Forum, which voiced objections to certain tax distribution provisions in one of the bills, prompted the NEC’s recommendation. Governors from the 19 northern states argued that the proposed derivation-based approach for Value Added Tax (VAT) allocation could disadvantage their region.
The four tax-related bills under review include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board Establishment Bill. President Tinubu affirmed on Friday that these bills, if reviewed within the legislative process, would allow for thorough input and modification to address concerns.
Quoting Onanuga, “President Tinubu believes that the legislative process, already in progress, offers an ideal opportunity for inputs and amendments rather than withdrawing the bills altogether.”
Encouraging NEC to allow this process to conclude, Tinubu expressed a willingness to engage with stakeholders to address reservations while the National Assembly evaluates the bills. His statement stressed the purpose behind forming the Presidential Committee on Tax and Fiscal Policy Reform in August 2023: to boost economic productivity and create a more investment-friendly environment.
Onanuga noted that the Committee’s work, involving over a year of consultations with a broad cross-section of society—including governors, business owners, trade associations, and professional bodies—was aimed at creating a balanced fiscal framework. Tinubu remains committed to engaging NEC and other critical stakeholders as the bills advance in the National Assembly.
Taiwo Oyedele, Chair of the Presidential Fiscal Policy and Tax Reforms Committee, defended the proposed bills earlier, advocating for a fairer VAT distribution system. He acknowledged the concerns raised by the Northern Governors, affirming that the current VAT derivation model—based on where VAT is collected rather than where goods and services are consumed—creates disparities that impact states across all geopolitical zones.
“Our proposal seeks to address these inequalities by considering the location where goods and services are consumed, providing a more balanced approach to revenue distribution,” Oyedele stated in a recent post on X.
Below are the major highlights of the four Bills as provided by Onanuga:
The Nigeria Tax Bill: This Bill seeks to eliminate multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.
The Nigeria Tax Administration Bill (NTAB): This Bill proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions to ease taxpayers’ compliance and enhance the revenue for all tiers of government.
The Nigeria Revenue Service (Establishment) Bill: The Bill seeks to re-establish 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 presidential aide stressed, “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 proposed reforms seek to consolidate these numerous taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.
“While there may be differences in approach or specific provisions of the new tax bills, what is not in contention is the need to review our tax laws and how we administer them to serve our overall national development agenda.”
