The Senate on Thursday approved the second reading of four tax reform bills submitted by President Bola Tinubu, following a voice vote during the legislative session.
President Tinubu had transmitted the bills to the National Assembly on 3 October, sparking debate across the country. Opposition came notably from Northern governors and other stakeholders, who raised concerns about the reforms. Responding to the backlash, the Presidency clarified that the proposals were not aimed at any particular region but were designed to foster national development.
Key Provisions of the Bills
One of the bills passed for second reading seeks to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombud. The proposed legislation is part of Tinubu’s broader tax reform agenda and aims to harmonise and coordinate tax administration while providing mechanisms to resolve disputes.
The Senate also deliberated on the general principles of the four tax reform bills during its session. The bills were transmitted following recommendations from the Taiwo Oyedele-led Tax Reforms Committee.
Mixed Reactions Among Lawmakers
While the reforms were generally regarded as essential to overhauling Nigeria’s tax system and easing the burden on citizens, some lawmakers expressed reservations.
Senator Ali Ndume raised concerns over the timing of the reforms and some of the proposals in the bills. He argued that amendments were necessary and suggested withdrawing the bills for further revision, adding, “Reforms are necessary. I am not against them. My issue is the timing and the need to secure the buy-in of governors, traditional rulers, and the National Economic Council (NEC).”
Ndume also highlighted specific concerns about the bills’ impact on Value Added Tax (VAT) and revenue derivation, cautioning that transferring tax burdens to manufacturers would ultimately affect consumers.
However, the Chief Whip countered this suggestion, emphasising the importance of advancing the bills to the public hearing stage for detailed scrutiny. “The bill should scale second reading and undergo thorough examination during the public hearing. Afterward, it can be subjected to clause-by-clause consideration,” he stated.
The Tax Bills in Detail
The four bills transmitted by President Tinubu include:
- The Nigeria Tax Bill 2024 – Aimed at providing a comprehensive fiscal framework for taxation in Nigeria.
- The Tax Administration Bill – Seeks to establish a clear and concise legal framework for tax administration to reduce disputes.
- The Nigeria Revenue Service Establishment Bill – Proposes repealing the Federal Inland Revenue Service (FIRS) Act and establishing the Nigeria Revenue Service.
- The Joint Revenue Board Establishment Bill – Seeks to create a tax tribunal and tax ombudsman to address disputes and foster transparency.
Tinubu’s Vision for Tax Reforms
President Tinubu has positioned these reforms as part of his administration’s broader strategy to strengthen Nigeria’s fiscal institutions and promote sustainable development. According to the president, the proposed changes will align with the government’s long-term objectives to improve efficiency and accountability in tax administration.
The Senate’s approval of the second reading signals a step forward in addressing Nigeria’s complex tax challenges, though debates are expected to intensify during the public hearing and subsequent legislative stages.