Tax Reform Bills: Details Emerge As Reps Pass Controversial Legislation For Second Reading

The House of Representatives on Wednesday (today), passed the controversial Tax Reform Bills for a second reading after an extensive debate among lawmakers regarding the fundamental principles of the proposed legislation.

Naijaonpoint reports that the House had previously merged the four tax reform bills submitted by President Bola Ahmed Tinubu last year into a single document before initiating the debate on the overarching principles.

This consolidation was prompted by a motion from House Leader, Prof. Julius Ihonvbere, with the approval of Speaker Abbas Tajudeen.

The merged bills include: “A Bill For an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters (HB.1756); A Bill for an Act to Repeal the Federal Inland Revenue Service (Establishment) Act, No.13, 2007 and Enact the Nigeria Revenue Service (Establishment) Bill to Establish Nigeria Revenue Service, charged with Powers of Assessment, Collection of, and Accounting for Revenue Accruable to the Government of the Federation and for Related Matters (HB.1757).

Others include “A Bill for an Act to Establish the Joint Revenue Board, the Tax Appeal Tribunal and the Office of the TaxOmbud, for the Harmonisation, Coordination and Settlement of Disputes arising from Revenue

Administration in Nigeria and for Related Matters (HB.1758) and A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation and Enact the Nigeria Tax Act to Provide For Taxation of Income, Transactions and Instruments, and for Related Matters (HB.1759).”

The House Leader, Professor Julius Ihonvbere, spearheaded the debate on the consolidated tax reform, emphasizing the urgent need to revamp the nation’s outdated tax system.

In his remarks regarding the fundamental principles of the proposed legislation, Ihonvbere expressed gratitude to the Nigerian Governors’ Forum for their significant contributions, particularly in refining the VAT sharing formula, which alleviated previous concerns surrounding the tax reform bills.

He highlighted that the bill is designed to modernize the tax framework, aiming to empower citizens and promote inclusive economic growth.

Ihonvbere noted that the proposed tax reforms would provide substantial benefits to Nigerians if enacted, including the harmonization of various taxes, a reduction in PAYE tax, the introduction of zero VAT on essential goods such as food, healthcare, and education, as well as incentives for low-income workers.

During the debate on the fundamental principles of the bills, a majority of lawmakers expressed their support for advancing the bill to a second reading.

In his contribution to the debate, Rep Bamidele Salam (PDP, Osun), expressed support the bill, saying, it will ensure more resources accrue to the subnational government to be able to provide the needed development.

Any Tax Reform Bill Should Prioritize Welfare Of Nigerians

Speaking further, Salam said characterized the current Nigerian tax administration system as outdated and redundant, which hampers economic growth and deters potential investors.

He stressed that it is essential that any tax reforms prioritize the wellbeing and welfare of the Nigerian populace.

In his remarks, Rep Sada Soli emphasized the importance of fairness and reasonableness in the formulation of tax reforms. He raised concerns regarding inconsistencies in several clauses of the proposed tax reform bills, urging the committee responsible for these bills to address and rectify these issues.

Soli also pointed out the vagueness present in certain clauses, warning that such ambiguity could lead to potential misuse and misinterpretation of the legislation.

Rep Ademorin Kuye, in support of the bill, highlighted the critical need for revenue generation to address the country’s infrastructural deficits, asserting that the tax reforms should receive backing.

Other lawmakers, including George Odinobi, Makki Yalleman, Cyril Hart, Igariwey Iduma, and Mariam Onuoha, also expressed their support for the bills, advocating for their passage to the second reading.

Following thorough discussions, the consolidated bills were overwhelmingly approved for a second reading after a voice vote conducted by Speaker Abbas Tajudeen.