UPDATE: SENATE APPROVES TAX REFORM BILLS FOR SECOND READING

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The Senate on Thursday through voice notes has approved the four tax proposals for second reading.

On October 3, President Tinubu Bola forwarded the four tax reform legislations to the National Assembly for review.

Governors from the North and other interested parties opposed the tax reforms, which led to controversy. The presidency expressed concern over the situation and clarified that the bills were intended to advance national development rather than to target any one area.

As part of Tinubu’s comprehensive tax reform plan, the Senate passed a bill for an act to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombud through second reading. The proposed law aims to organise, harmonise, and settle disagreements pertaining to Nigeria’s revenue management.

Lawmakers discussed the fundamental tenets of the tax reform measures during the session. Following the suggestions of the Taiwo Oyedele-led Tax Reforms Committee, President Tinubu sent four proposals to the Senate on September 3, 2024, which were discussed in a closed-door session.

Sen. Ali Ndume had concerns regarding the bill’s timing and specific contents, despite the fact that the reforms were widely accepted as being essential to modernising Nigeria’s tax structure and lowering the tax burden on citizens.

If the reforms were withdrawn and reintroduced, he said, they could be enacted “in less than 24 hours” with the required revisions.

The Chief Whip, however, vehemently disagreed, highlighting the significance of moving the bill on to the public hearing stage.

“The bill should scale second reading and undergo thorough examination during the public hearing. Afterward, it can be subjected to clause-by-clause consideration.”

According to the only dissenting voice, Sen. Ali Ndume: “Reforms are necessary, I am not against any reforms. My problem is the timing as it is today in Nigeria as we say I want to add to what Senator Seraike said.

“One will be at the public hearing and the issue of derivation because the Constitution has to be amended before some of the proposals of the Bill can be affected.

“This bill should be withdrawn, we work on it and submit it after getting the buy-in of the Governors, Traditional Rulers and the NEC.

“I looked at the bill and it contains so many but these two things VAT and Derivation. You negotiate first before we come to take a position.

“It looks attractive but it may not be what it is. If you move a tax burden to the manufacturer he will transfer it to the consumer.

“In the bill, we say a reduction from 30% to 25% which means that the person in Nnewi that is no longer able to make Billions, you are charging him with the same person that is just sitting down doing Nothing.”

President Tinubu Bola transmitted the four tax reform bills to the National Assembly for consideration on October 3.

The bills are; the Nigeria Tax Bill 2024, which is expected to provide the fiscal framework for taxation in the country, and the Tax Administration Bill, which will provide a clear and concise legal framework for all taxes in the country and reduce disputes.

The others are; the Nigeria Revenue Service Establishment Bill, which will repeal the Federal Inland Revenue Service (FIRS) Act and establish the Nigeria Revenue Service, and the Joint Revenue Board Establishment Bill, which will create a tax tribunal and a tax ombudsman.

The president stated that the bills would strengthen Nigeria’s fiscal institutions and align with his administration’s broader development goals.