From Ndubuisi Orji, Abuja
House of Representatives Speaker, Tajudeen Abbas, has said the House was yet to take a position on the four tax reform bills transmitted to the parliament, recently, by President Bola Tinubu.
Abbas, who stated this, yesterday, at an interactive session on the tax bills, said the House will scrutinise the proposed legislations thoroughly to ensure they align with the interest of Nigerians.
This is as the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said tax bills were not aimed at undermining any section of the country.
He said they were aimed at enhancing efficiency and ensuring equity among states in the sharing of Value Added Tax (VAT).
President Tinubu, had, in September, transmitted four tax bills, including the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
However, the bills have been trailed by controversy with state governors demanding the withdrawal of the proposed legislations to make for more consultations; a demand the president has declined.
Nevertheless, the speaker said while the tax bills are aimed at diversity, the country’s revenue base, as well as fostering a conducive environment for investment and innovation, lawmakers will approach these “reforms thoughtfully, understanding their potential implications for every segment of society.”
Abbas explained the interactive session was intended to broaden the understanding of members on the tax bills and commence constructive dialogue on the contentious provisions of the proposed legislations.
According to him, this is to “build the consensus necessary to produce versions of the bills that align with the interests of the executive, the legislature, sub-national governments, and the Nigerian people.
“Importantly, this session will help us identify areas needing amendment, clarification, or improvement and consider the compatibility of these bills with the 1999 Constitution (as amended) and other extant laws.
“Tax reforms are a cornerstone of our House legislative agenda because of their central role in achieving sustainable economic growth and development. In every modern state, taxes are the bedrock of public revenue, providing the resources required to deliver education, healthcare, infrastructure, and security.
“Yet, Nigeria, despite being Africa’s largest economy, struggles with a tax-to-GDP ratio of just six per cent -far below the global average and the World Bank’s minimum benchmark of 15 per cent for sustainable development. This is a challenge we must address if we are to reduce our reliance on debt financing, ensure fiscal stability, and secure our future as a nation.
“The controversies surrounding these bills -whether in the media, civil society, or among governance stakeholders- are a reflection of their importance. Such debates are healthy and necessary in a democracy, and this session aims to channel those discussions into productive outcomes. It is critical that we listen to diverse perspectives, ask probing questions, and seek clarity on any unclear provisions.
“Taxes should be fair, transparent, and justifiable, balancing the need for public revenue with the burdens they impose on individuals and businesses.”
Oyedele, while elaborating on the tax bills, explained they offer an opportunity for comprehensive overhaul of the tax framework to drive economic growth, and position the country as a competitive economy within the comity of nations.
According to him, the tax reforms bills are geared towards creating a business-friendly environment that attracts local and foreign investment.
He listed the benefits to include: “Boosting exports: goods, services, and intellectual property exports will benefit from zero-rated VAT and other incentives to enhance Nigeria’s global trade competitiveness.
“Equity among states: VAT revenue sharing will adopt an equitable model to reward states for their economic contributions, rather than the current model which is skewed in favour of states with head office locations where VAT remittances are usually made.
“Support for small businesses: Tax exemptions, including zero percent corporate income tax, VAT, and withholding tax, will apply to small businesses with annual turnover of N50 million or less.
“Relief for workers and households: Minimum wage earners will be exempt from PAYE (personal income tax), while over 90 per cent of workers, across sectors, will see a reduced tax burden. Essential items such as food, education, healthcare will enjoy zero per cent VAT while rent, public transportation, and renewable energy will be exempted, providing relief for low-income households that spend nearly 100 per cent of their income on these necessities.
“Simplifying and rationalising taxes: Over 50 nuisance taxes are to be repealed, with remaining levies harmonised into a few number of taxes. Corporate income tax rates will reduce from 30 per cent to 25 per cent over the next two years, and earmarked taxes on companies will be replaced with a streamlined single levy.”