The Nigerian House of Representatives has softened its initial opposition to the Tax Reform Bills, passing them through a second reading and advancing them to the public hearing stage. This shift follows months of consultations and debates sparked by concerns from various quarters, including Northern leaders and the Nigerian Governors’ Forum, 9am news reports.
The bills, consolidated into a single document for streamlined debate, aim to overhaul Nigeria’s outdated tax laws. They include the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill.
House Speaker Abbas Tajudeen had earlier dissolved the House into an executive session to address the uproar that followed the bills’ initial presentation in October 2024. After extensive consultations, members returned with a more receptive stance, acknowledging the need for reforms to boost revenue generation.
Minority Leader Kingsley Chinda highlighted the importance of distinguishing between the spirit and the letter of the law. He supported the bills’ overall intent but raised concerns about specific provisions, particularly the proposed increase in Value Added Tax (VAT) from 7.5% to 10%, and eventually 15%. Chinda advocated for a VAT reduction to ease the economic burden on citizens.
House Leader Julius Ihonvbere emphasized that the reforms would not disproportionately impact the poor. He reassured Nigerians that modernizing the tax system would foster economic growth, create jobs, and improve living standards.
However, concerns persist. Minority Whip Ali Isa warned that increasing VAT amid economic hardship could exacerbate the struggles of ordinary Nigerians. Representative Sada Soli pointed to inconsistencies, particularly Section 141, which allegedly conflicts with the 1999 Constitution. He also criticized the lack of interpretation clauses, which could lead to implementation challenges.
Despite these reservations, the general consensus favored progression. Representative Marian Onuoha supported the bills’ aim to increase taxes on wealthier individuals while protecting lower-income earners. Bamidele Salam, chair of the House Committee on Public Accounts, underscored the urgency of reform, noting Nigeria’s low tax-to-GDP ratio and the detrimental impact of an outdated tax system on investor confidence.
As the bills move to the public hearing stage, the House remains focused on striking a balance between efficient revenue generation and safeguarding the welfare of citizens. The coming weeks will test lawmakers’ ability to address the highlighted concerns while delivering on their promise of a more robust and equitable tax regime.
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