President Bola Tinubu has turned down the National Economic Council’s (NEC) recommendation to withdraw the proposed Tax Reform Bills submitted to the National Assembly, emphasizing that ongoing reforms remain vital for Nigeria’s economic future. Vice President Kashim Shettima, along with the 36 state governors comprising NEC, had suggested that the bills be withdrawn to allow further consultation.
In a statement issued by presidential spokesman Bayo Onanuga, President Tinubu expressed his appreciation for NEC’s input and their proactive approach. However, he underscored his view that the legislative process underway would allow necessary amendments and revisions, making it unnecessary to retract the bills. Tinubu encouraged NEC to permit the National Assembly to proceed with its deliberations, affirming that the administration welcomes further consultations to address any reservations about the proposed bills.
Tinubu’s tax reform agenda, developed by the Presidential Committee on Tax and Fiscal Policy Reform, which was launched in August 2023, is designed to create a more efficient and investor-friendly tax system. According to Onanuga, the committee worked extensively with input from a wide range of stakeholders, including representatives from trade associations, professional bodies, government ministries, state governors, and private sector actors. The goal, Tinubu noted, is to make Nigeria’s economy more conducive to growth and align the tax system with global standards.
The proposed tax bills currently before the National Assembly are intended to unify and modernize Nigeria’s tax administration. These key bills include:
– Nigeria Tax Administration Bill (NTAB): This bill aims to introduce a unified administrative framework for all taxes at the federal, state, and local levels. By harmonizing these processes, the bill seeks to ease taxpayer compliance and enhance revenue collection for all tiers of government.
– Nigeria Revenue Service (NRS) Bill:This bill proposes restructuring the Federal Inland Revenue Service (FIRS) into the Nigeria Revenue Service, aligning it to reflect its nationwide scope beyond federal responsibilities alone.
– Joint Revenue Board Establishment Bill: The bill seeks to establish a Joint Revenue Board, replacing the existing Joint Tax Board, to cover federal and state tax authorities. Additionally, it introduces the Office of the Tax Ombudsman under this new board, focusing on safeguarding taxpayer rights and resolving disputes.
The overarching goal of the proposed reforms is to streamline Nigeria’s tax operations, which have long been hindered by overlapping responsibilities and fragmented administrative structures. Currently, taxes such as the Company Income Tax (CIT), Personal Income Tax (PIT), Petroleum Profits Tax (PPT), Capital Gains Tax (CGT), Value-Added Tax (VAT), and other levies are handled separately, each with its own set of regulations. The reforms aim to consolidate these into a cohesive framework, reducing redundancies and promoting efficient tax management.
The Tinubu administration believes that these structural changes will help align Nigeria’s tax laws with the broader economic development agenda. Tinubu assured that, while specific provisions within the bills may differ, the administration remains open to further feedback, especially as it relates to refining the tax laws to achieve a balanced and sustainable system.
Onanuga reiterated that the Tinubu administration views NEC as a critical partner in shaping Nigeria’s economic policies, acknowledging their important role in advising on issues that influence national prosperity. Nevertheless, Tinubu emphasized that tax reforms must continue as planned, seeing them as essential to driving economic growth and improving the operational environment for businesses across Nigeria.
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