The Senate on Thursday passed four tax reform bills for second reading following deliberation on them by lawmakers led by Senate Majority Leader, Sen. Opeyemi Bamidele, at plenary.
The four draft fiscal legislations comprised the Nigeria Tax Bill 2024, Nigeria Revenue Service Establishment Bill, Tax Administration Bill, and Joint Revenue Board Establishment Bill
While the first bill aims to establish a fiscal framework for taxation in the country, the second seeks to replace the Federal Inland Revenue Service Act by creating a new body, the Nigeria Revenue Service. The Tax Administration Bill is designed to create a legal structure for taxes and help reduce tax-related disputes while the fourth proposes the formation of a tax tribunal and a tax ombudsman.
During the debate on the proposed fiscal laws, Sen. Bamidele harped on the importance of the reforms being championed by the President Bola Tinubu-led administration in terms of simplification of the tax system, reduction in the tax burden on small businesses, and improvement in tax collection methods, among others.
He further stressed: “It will eliminate double taxation. In the area of tax exemption of salaries below the minimum wage, it is proposed that the state governments share 55 percent of VAT from 15 percent. There is a reasonable effort to establish core tax statutes in the bill.”
In his contribution to the deliberations on the bills, Senator Seriake Dickson, maintained that Nigeria’s over-reliance on oil revenues over the past years had hindered the development of a solid tax system.
While noting that some issues have been raised on some of the tax bills, the lawmaker emphasized the need to ensure transparency in the tax system in order to optimize their potential for broad based development.
He said: “There is nothing wrong in saying that phone calls made in Sokoto are calculated and paid to those states. We should ensure that this is transparent.”
During the debate, Sen. Ali Ndume, who also argued that tax reforms had become imperative, suggested that the bills should be delayed for further review, citing concerns over timing and issues surrounding derivation and VAT.
The lawmaker clarified: “Reforms are necessary if we have to move forward. My problem is number one, timing. Number two, the issue of derivation and VAT. The constitution has to be amended for some of these provisions to be effected.”
While opposing the suggestion that the tax bills should be delayed for further review, the Chief Whip of the Red Chamber, Sen. Tahir Monguno, said that the bills should not be withdrawn as they could still be reviewed during the public hearing process as the bills have the potential of reducing “the tax burden on Nigerians.”
After very elaborate deliberations on the bills, the Senate President, Sen. Godswill Akpabio, put the bills to a vote, and majority of the lawmakers voted that they the bills be scheduled for second reading.
