By John Joseph
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President Bola Ahmed Tinubu has reaffirmed his commitment to the federal government’s tax reform bills, currently before the National Assembly, stating that they will benefit all Nigerians. During his first media chat with journalists in Lagos since his inauguration in 2024, Tinubu emphasized that the tax reforms are essential for Nigeria’s economic growth.
“The tax reforms are here to stay. We cannot just continue doing what we did yesterday in today’s economy; we cannot retool the economy with old laws,” he stated. Tinubu added that he has a clear focus on what Nigerians need and what must be done, acknowledging that the new dawn comes with its challenges.
The tax reform bills have generated significant controversy, with Northern governors and the National Economic Council rejecting them due to concerns that they may not benefit Nigerians. Despite this, Tinubu remains resolute, believing that the reforms will create a more equitable and efficient taxation model.
Key Provisions of the Tax Reform Bills
The proposed legislation aims to overhaul Nigeria’s tax collection and administration systems. Some of the key provisions include:
Revisions to the Value Added Tax (VAT) revenue-sharing formula: The new model allocates 60% of VAT revenue to the state where goods and services are consumed, 20% distributed based on population, and the remaining 20% equally shared among all states.
Exemptions for small businesses and average Nigerians: Individuals earning less than ₦800,000 annually will be exempt from income tax, while small businesses with turnovers below ₦50 million will be exempt from corporate tax.
Mixed Reactions to the Tax Reform Bills
The tax reform bills have received mixed reactions from stakeholders. While some believe that the reforms will promote economic growth and development, others have expressed concerns about the potential impact on certain regions.
The Northern Region has expressed vehement opposition to the bills, citing concerns that they may disadvantage the region. However, some experts believe that the reforms will ultimately benefit the region by encouraging economic self-reliance and modernization.
The National Assembly has assured that it will not reject the tax reform bills outright, but will instead engage with stakeholders to address concerns and ensure that the reforms are implemented fairly and effectively.
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