President Bola Tinubu will, on Thursday, sign into law four groundbreaking tax reform bills that will transform Nigeria’s fiscal and revenue framework.
The four bills, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, were passed by the National Assembly after extensive consultations with various interest groups and stakeholders.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga confirmed this in a statement on Wednesday.
When the new tax laws become operational, they are expected to significantly transform tax administration in the country, leading to increased revenue generation, improved business environment, and a boost in domestic and foreign investments.
The historic presidential assent to the bills at the Presidential Villa, Abuja, will be witnessed by the Senate President, Speaker of the House of Representatives, Senate Majority Leader, House Majority Leader, chairman of the Senate Committee on Finance, and his House counterpart.
The Chairman of the Governors Forum, the Chairman of the Progressives Governors Forum, the Minister of Finance and Coordination Minister of the Economy, and the Attorney General of the Federation will also attend the ceremony.
One of the four bills is the Nigeria Tax Bill (Ease of Doing Business), which aims to consolidate Nigeria’s fragmented tax laws into a harmonised statute.
By reducing the multiplicity of taxes and eliminating duplication, the bill will enhance the ease of doing business, reduce taxpayer compliance burdens, and create a more predictable fiscal environment.
The second bill, the Nigeria Tax Administration Bill, will establish a uniform legal and operational framework for tax administration across federal, state, and local governments.
The Nigeria Revenue Service (Establishment) Bill, the third bill, repeals the current Federal Inland Revenue Service Act and creates a more autonomous and performance-driven national revenue agency— the Nigeria Revenue Service (NRS).
It defines the NRS’s expanded mandate, including non-tax revenue collection, and lays out transparency, accountability, and efficiency mechanisms.
The fourth bill is the Joint Revenue Board (Establishment) Bill. It provides for a formal governance structure to facilitate cooperation between revenue authorities at all levels of government. It introduces essential oversight mechanisms, including establishing a Tax Appeal Tribunal and an Office of the Tax Ombudsman.
The Tax Reform Bill became an issue of debate as Northern elites had opposed the bill, tagging it ‘anti-North.’
In the bill, current sharing formula of FG of 15 per cent, States 50 per cent and LGs 35 per cent was proposed to become FG 10 per cent, States 55 per cent and LGs 35 per cent.
But the contention is the Value Added Tax sharing formular.
The current formula for sharing VAT among states is based on 20 per cent derivation, 50 per cent equality and 30 per cent population.
The tax reform proposes a different model of derivation which will attribute VAT to the place of supply and consumption rather than the current model which attributes VAT to the state where it is remitted thereby favouring states with companies headquarters.
Also, derivation under the new model will account for 60 per cent of VAT distribution, which is up from 20 per cent.