Minority Caucus Backs Nigeria’s Tax Overhaul, Calls for Key Revisions in Proposed Bills

The House of Representatives Minority Caucus has expressed support for the Federal Government’s ambitious tax reforms aimed at overhauling Nigeria’s taxation system, while calling for crucial adjustments to some key provisions in the proposed bills.

President Bola Tinubu introduced the tax reform bills to the National Assembly on September 3, 2024, following recommendations from the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele. The proposed bills cover four key areas: the Nigeria Tax Bill 2024, which provides a comprehensive fiscal framework for taxation; the Tax Administration Bill, designed to streamline tax processes and reduce disputes; the Nigeria Revenue Service Establishment Bill, which seeks to replace the Federal Inland Revenue Service Act; and the Joint Revenue Board Establishment Bill, which would set up a tax tribunal and tax ombudsman.

Minority Caucus Leader Kingsley Chinda lauded the government’s initiative but voiced concerns over the N50 million threshold for Company Income Tax exemption. He argued that, given Nigeria’s current inflationary pressures, this figure was insufficient and called for a revision to at least N100 million.

Chinda further emphasized that Nigeria’s focus should be on expanding the tax base instead of simply increasing existing taxes. “We must bring more individuals and businesses into the tax net and plug existing leakages. Only once this is accomplished should we consider raising taxes,” he stated.

Chinda also called for a timely update to outdated tax laws to better align with the current economic climate.

Mansur Soro, who represents the Darazo/Ganjuwa Federal Constituency in Bauchi State, underscored the need for broader consultations on the proposed reforms, particularly involving state governors via the National Economic Council (NEC). He warned that bypassing the NEC in such a significant matter could harm federal-state relations in the long run.

While recognizing some positive elements in the bills, such as the tax-free threshold and the centralized management of revenue, Soro emphasized that a more inclusive approach involving key stakeholders was essential for a truly impactful reform.

Oluwole Oke, a lawmaker from Osun State, urged critics of the bills to allow the legislative process to unfold. He advocated for a full debate on the principles, merits, and potential downsides of the bills. “The bills have been gazetted and read for the first time. Let’s debate their principles, listen to the public, and incorporate feedback from our constituents,” Oke stated.

Despite their differences, the lawmakers agreed that tax reform is essential for addressing Nigeria’s fiscal challenges. Chinda called for a balanced approach that protects citizens’ interests, while Soro and Oke stressed the importance of stakeholder engagement and adherence to proper legislative procedures.

As the National Assembly resumes its activities, the tax reform bills will be a central topic of debate, balancing the need for fiscal modernization with the goal of ensuring broad economic inclusivity.