The Presidential Fiscal Policy and Tax Reforms Committee has recently developed several key bills aimed at reforming Nigeria’s tax system.
- These include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, which are currently before the National Assembly.
- According to Taiwo Oyedele, chairman of the committee, these bills aim to address challenges such as the multiplicity of taxes, fragmentation of revenue administration, and the excessive tax burden on vulnerable citizens, including small businesses and low-income earners.
- The bills also seek to create a friendly and competitive business environment in Nigeria by tackling incessant taxes that hinder business growth.
- Major deliverables of the bills include promoting equity within the tax system.
- Since their announcement and transmission to the National Assembly in September, there have been controversies surrounding the tax bills.
- A significant point of contention is the proposal to shift the current distribution model of Value Added Tax (VAT) to a derivation-based model. Northern leaders argue that companies should remit VAT based on the locations of their headquarters and tax offices rather than where services and goods are consumed.
- They contend that this proposal could negatively impact the North and have called on lawmakers from the region to oppose the bill in its current form, demanding that national policies be considered.
