Tinubu Urges Senate for Practical Tax Reform Legislation

Lawmaker Tinubu Calls for Effective Tax Reform in Nigeria

President Bola Tinubu has urged the Nigerian Senate to ensure that the tax reform bills currently under consideration result in effective and practical legislation. This appeal was conveyed by Senator Sani Musa, Chairman of the Senate Committee on Finance, during a public hearing on the bills in Abuja. Senator Musa recounted his recent discussion with President Tinubu, stating, “I met President Bola Ahmed Tinubu two days ago regarding the tax reform bills, and he instructed me, ‘Mr. Chairman, go and do the needful. Give me a law that is workable from the tax reform bills I submitted to the National Assembly in October last year.'”

The tax reform bills in question, transmitted to the National Assembly in October 2024, include:

1. The Nigeria Tax Bill 2024
2. The Nigerian Tax Administration Bill 2024
3. The Nigeria Revenue Service Establishment Bill 2024
4. The Joint Revenue Board Establishment Bill 2024

These proposed laws aim to enhance tax administration and compliance in Nigeria. Senate President Godswill Akpabio has emphasized the importance of these reforms, noting that less than 30% of Nigerians currently pay taxes, yet there is a universal demand for infrastructure and social amenities. He stated, “Nigeria has chosen to leave behind outdated tax practices and bureaucratic hurdles to a tax administration that would be robust, transparent, and conducive to business.

The proposed reforms have sparked debate, particularly concerning the plan to increase the Value Added Tax (VAT) from the current 7.5% to 10% in 2025, 12.5% in 2026, and 15% by 2030. Critics argue that this could raise transaction costs and deter investments, while proponents believe it will enhance revenue generation and reduce inflation.

Additionally, concerns have been raised about the regional implications of the reforms. Some northern leaders fear that changes in VAT allocation could disproportionately benefit southern states with larger economies, potentially exacerbating existing economic disparities.

In response to these concerns, President Tinubu has reassured Nigerians that the tax reform bills are not designed to favor any particular region. Senator Musa conveyed the President’s message during the public hearing, emphasizing that the reforms aim to create a fair and efficient tax system for the entire country.

The Senate Committee on Finance continues to engage with stakeholders to ensure that the final legislation addresses these concerns and contributes to Nigeria’s economic growth and development.