The new Nigeria Tax Reform Bills before the National Assembly will repeal over 50 taxes that constitute nuisance to Nigerian taxpayers.
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, stated this in his post on his X handle on Tuesday.
The new tax bills have generated a lot of controversy among Nigerians with some state governors and lawmakers asking that the bill be withdrawn.
The most contentious is the new value added tax distribution model which the committee said will henceforth be by derivation to promote equity.
Oyedele said apart from the tax laws that would be repealed when the new law comes into effect, the remaining levies would be harmonised into a few number of taxes.
He said that 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.
He said the tax reform bills are aimed at transforming the Nigerian economy to empower Nigerians and facilitate inclusive economic growth.
The bills which include, the Nigeria Tax Bill – to harmonise all the major taxes such as corporate income tax, personal income tax, VAT etc; Nigeria Tax Administration Bill – which provides a framework for tax management covering taxpayer identification, registration, assessment, collection, enforcement; the Nigeria Revenue Service (Establishment) Bill – which seeks to replace the FIRS with the NRS to perform a broader role of revenue administration in Nigeria and drive collaboration with subnational governments and MDAs, and the Joint Revenue Board (Establishment) Bill – to transform the JTB to JRB with an expanded mandate and enhanced role for cooperation and tax harmonisation, “altogether offer a comprehensive overhaul of the country’s tax framework to drive economic growth, support Nigerian households, and position the country as a competitive economy within the comity of nations,” Oyedele said, adding that the reforms reflect a commitment to equity, efficiency, and sustainable development.
Highlights of the tax bills include, empowering the youths with digital economy opportunities; boosting exports by ensuring goods, services, and intellectual property exports will benefit from zero-rated VAT and other incentives to enhance Nigeria’s global trade competitiveness, and offer tax exemptions, including zero per cent corporate income tax, VAT, and withholding tax, to small businesses with annual turnover of N50 million or less.
Others include, relief for workers and households by offering minimum wage earners exemption from PAYE (personal income tax), while over 90 per cent of workers across the private and public sectors will see a reduced tax burden.
It also promises that 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.
On the vexatious new value added tax distribution model, Oyedele said the new model will bring equity among states.
According to him, “VAT revenue will be distributed among states based on an equitable model to reward economic contributions, rather than the current model which is skewed in favour of states with head office locations where VAT remittances are usually made.”
He also said that the new tax law will promote a new National Fiscal Policy, a strategic framework for fair taxation, responsible borrowing, and sustainable spending to guide the fiscal system.
“These tax reforms aim to alleviate the rising cost of living, foster economic equity, and create a business-friendly environment to attract local and foreign investments,” he explained.
“All tiers and arms of government are committed to driving inclusive growth and ensuring that all Nigerians benefit from a prosperous economy.”
