Fiscal Responsibility Commission Backs Controversial Tax Reform Bills

The bills, developed by the Presidential Fiscal Policy and Tax Reforms Committee on instruction by President Bola Tinubu, aim to improve fiscal governance, transform public revenue architecture boost economic growth.

The Chairman of the commission, Mr Victor Muruako, expressed the support of the organisation at an interaction with academics and journalists on the sidelines of the Fellowship Lecture and Investiture Ceremony of the Capital Market Academics of Nigeria (CMAN) on Monday in Abuja.

According to a statement by FRC’s Head of Strategic Communications Officer, Mr Bede Anyanwu on Tuesday, the agency revealed that a critical analysis of the bills showed that it does not contain any issue or item that could be said to be skewed to favour any region or section of the country.

“The bills rather create a more equitable distribution of resources amongst Nigeria’s federating states,” Mr Muruako added, noting that the analysis also confirmed that the proposed reforms are designed to benefit all Nigerians, particularly low-income earners and Micro Small and Medium Businesses (MSMBs).

Mr Muruako outlined some of the key benefits of the reforms, including tax relief for low-income earners: individuals earning less than N1.7 million annually will pay less income tax, exemption of tax on small businesses with turnovers below N50 million, and exemption of over 90 per cent of small businesses from profit tax payment.

It was stated that the new bills intend to simplify tax administration in the country and make it more transparent.

Increasing revenue for subnational governments as states and local governments will receive a larger share of VAT revenue, empowering them to provide better public services, and improving ease of doing business, noting that reforms will reduce the administrative burden on businesses and make it easier to comply with tax regulations.

The FRC explained that it is upbeat that the tax relief for low-income earners will enhance savings and capital formation at household levels.

The commission also expressed confidence that given the positive correlation between savings and investment, explaining that the increase in small household investments across the board would lead to improvements in the sustainable growth of the nation’s economy.

He also opined that the reduced tax burden on small businesses would give Micro-Small Medium Enterprises breathing space, and enable them to grow organically, hence contributing to a sustained increase in the nation’s GDP in the near future.

On the recent controversies over the bills, Mr Muruako praised President Tinubu for allowing room for further dialogue, appealing to all stakeholders across geopolitical zones to support the bills because their transformative potentials stand to benefit every Nigerian.