By Yemi Olakitan
In a significant move to overhaul Nigeria’s tax system, the Senate passed the tax reform bills for a second reading on Thursday. The bills, forwarded by President Bola Tinubu in October 2024, aim to simplify the tax landscape, reduce the burden on small businesses, and streamline tax collection.
The four tax bills include: Nigeria Tax Bill 2024, which provides the fiscal framework for taxation in the country.
Tax Administration Bill, establishes a legal framework for all taxes in the country, reducing disputes. Nigeria Revenue Service Establishment Bill, repeals the Federal Inland Revenue Service Act, establishing the Nigeria Revenue Service.
The Joint Revenue Board Establishment Bill creates a tax tribunal and a tax ombudsman.
Senate Leader Opeyemi Bamidele explained that the bills seek to ensure uniformity in tax revenue administration, eliminate double taxation, and deploy taxation to encourage private sector investments.
The bills propose exempting those earning minimum wage or less from PAYE deductions. Small businesses with an annual turnover of N50,000,000 or less are also exempt from paying taxes. Additionally, there’s a proposed reduction in company income tax from 30% to 25% by 2026.
While some lawmakers, like Senators Sani Musa and Seriake Dickson, supported the bills, others, like Senator Ali Ndume, expressed concerns about the timing and provisions surrounding derivation and VAT.
The Senate President, Godswill Akpabio, referred the bills to the Committee on Finance, which is expected to report back within six weeks.
