Tax Reform Bills to be enacted by Q1, implementation starts July –Oyedele

By Uche Usim

The Chairman, Presidential Committee on Tax Policy and Fiscal Reforms, Taiwo Oyedele, has revealed that Nigeria’s tax reform bills will be passed into law by the first quarter of 2025, with implementation scheduled to commence in July.

Oyedele shared these updates over the weekend at The Platform, an event organised by The Covenant Nation to foster dialogue on national development.

He said: “Part of the expectation is we expect the tax reforms to be approved, particularly the tax reform bills in 2025. Our expectation is before the end of Q1, and therefore, we can give notice to taxpayers to prepare themselves with capacity and begin to implement around 1st of July.”

Addressing recent discussions on the proposed value-added tax (VAT) sharing formula, Oyedele said his committee has no objections to the revisions suggested by the Nigeria Governors’ Forum (NGF).

On January 16, the NGF endorsed the proposed tax reform bills under deliberation at the national assembly and recommended a new VAT sharing formula aimed at equitable distribution.

The Oyedele-led committee initially proposed a VAT-sharing structure comprising 20% based on equality, 60% based on derivation, and 20% based on population. However, northern governors opposed the formula, arguing that it disadvantaged their region and called for its rejection by the national assembly.

Following deliberations ith the presidential committee, the NGF proposed a revised structure: 50% based on equality, 30% on derivation, and 20% on population.

“You also need to consider other things, including political considerations,” Oyedele explained. “So, once the governors proposed their formula for sharing the VAT revenue, we had no objections to that. At the end of the day, reforms are not just about technical accuracy; they must also balance political realities.

“If you need to move one kilometre, you don’t have to move all of that at once; you can’t even jump one kilometre at once. Sometimes, you need to move gradually, take a breather, reflect, gather more data, and then proceed again.”

Oyedele also highlighted the potential benefits of the tax reform bills across various sectors of the economy.

“All sectors will be positively impacted, particularly agriculture and manufacturing, as well as industries generally,” he noted. “We also have provisions in those tax bills that prioritize specific sectors, such as power generation and innovation. Even if you’re not going to look at everything in that bill, go and find that section where we have those sectors.”The tax reform agenda gained momentum on October 13, 2024, when President Bola Tinubu urged the national assembly to consider and pass four key tax reform bills. The proposed legislation includes the Nigeria Tax Bill, the Tax Administration Bill, and the Joint Revenue Board Establishment Bill.

Tinubu’s reforms also propose repealing the law establishing the Federal Inland Revenue Service (FIRS) and replacing it with the Nigeria Revenue Service.

With the backing of the NGF and stakeholders, these reforms aim to streamline Nigeria’s fiscal policies and tax administration, paving the way for a more equitable and efficient tax system.