Abuja, Nigeria — The Senate on Thursday passed four tax reform bills proposed by President Bola Ahmed Tinubu for second reading, marking a significant step in the administration’s fiscal reform agenda.
The bills advanced after Senator Opeyemi Bamidele, the Senate Majority Leader, led a debate, emphasizing their potential to simplify taxation, ease the burden on small businesses, and streamline revenue collection processes.
“These reforms aim to eliminate double taxation and introduce provisions such as tax exemptions for salaries below the minimum wage,” Bamidele explained. He also highlighted a proposal to increase state governments’ share of Value Added Tax (VAT) revenue from 15 percent to 55 percent, adding, “There is a reasonable effort to establish core tax statutes in the bill.”
Divergent Opinions on Reform Proposals
While the bills received broad support, some senators raised concerns. Seriake Dickson, representing Bayelsa West, pointed out that Nigeria’s reliance on oil revenue historically overshadowed the development of a robust tax system.
“I am aware that some issues have been raised, and that is legitimate,” Dickson remarked. “For instance, ensuring that taxes from phone calls made in states like Sokoto are transparently remitted to the appropriate authorities.”
Senator Ali Ndume from Borno South called for the bills to be temporarily set aside for further scrutiny.
“Reforms are necessary if we have to move forward,” Ndume acknowledged, “but the timing and constitutional issues surrounding derivation and VAT sharing need to be addressed before proceeding.”
However, Senator Tahir Monguno, the Chief Whip, opposed Ndume’s suggestion, advocating for the bills to progress while allowing for adjustments during public hearings. “These bills will reduce the tax burden on Nigerians,” Monguno argued.
Key Provisions and Next Steps
The tax reform bills aim to:
- Simplify Nigeria’s tax system and eliminate redundancies.
- Reduce taxation on small businesses.
- Provide exemptions for individuals earning below the minimum wage.
- Increase state governments’ VAT share to enhance revenue distribution.
Senate President Godswill Akpabio put the bills to a vote, and they were passed despite differing opinions among senators. The proposals, submitted to the National Assembly in October, will now proceed to the committee stage for further consideration and public hearings.
If enacted, these reforms are expected to overhaul Nigeria’s tax landscape, foster economic growth, and ensure more equitable revenue distribution across the country.