Senate to Debate Tax Reform Bills

The Nigerian Senate will deliberate on the Tax Reform Bills today (Thursday), with the possibility of advancing them to a second reading. This was revealed on Wednesday during the plenary session by Deputy Senate President Jibrin Barau, who hinted at the likely passage of the bills. Senate Leader Opeyemi Bamidele confirmed the plans, emphasizing the involvement of tax experts to guide the debates.

The session follows a detailed presentation by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms. Accompanied by Federal Inland Revenue Service (FIRS) Chairman Zacchaeus Adedeji and Budget Office Director-General Tanimu Yakubu, Oyedele explained the key aspects of the four proposed bills to lawmakers.

President Bola Tinubu had earlier sent the Tax Reform Bills to the National Assembly in October. These reforms aim to overhaul Nigeria’s tax system, with proposals to harmonize tax laws, simplify processes, and exempt low-income earners from personal income tax. Specific highlights include:

• Nigerian Tax Bill: Harmonizes major taxes and simplifies processes.
• Tax Administration Bill: Establishes standards and promotes technology use for efficient tax collection.
• Nigerian Revenue Service Establishment Bill: Proposes a new revenue service to enhance tax coordination.
• Joint Revenue Board Establishment Bill: Encourages collaboration among tax authorities and introduces a Tax Ombudsman to support small businesses.

Key reforms also address the contentious VAT sharing formula, proposing a distribution based on consumption rather than corporate headquarters location. Oyedele stressed that the reforms are designed to foster prosperity, not poverty, and eliminate the minimum tax for loss-making companies while introducing a 15% tax rate for large firms’ profits.

The presentation was met with widespread approval from lawmakers, who had no questions during the plenary. However, the session was not without drama. Before the presentation, some senators, including Abdul Ningi (PDP, Bauchi Central), raised procedural concerns, arguing that such matters should be handled at the committee level. Deputy Senate President Barau responded by emphasizing transparency, allowing Nigerians to witness the proceedings.

Despite initial objections, a motion to suspend Senate rules passed, granting the economic team access to the chamber. Following the presentation, Barau reassured lawmakers and the public that the bills’ passage would involve further steps, including public hearings and committee reviews.

The Senate is set to continue discussing the bills today, with provisions for lawmakers to raise questions and seek clarifications.