Seven key facts about Tinubu’s tax reform bill

President Bola Tinubu’s administration recently introduced the Nigeria Tax Bill 2024 to the National Assembly.

The bill, officially titled “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,” has generated widespread attention and debate.

Here are seven key things to know about this proposed reform:

1. Comprehensive overhaul of tax laws

The bill aims to repeal outdated taxation laws and consolidate various legal frameworks into a single, unified Nigeria Tax Act.

This move seeks to simplify the country’s tax system and make compliance easier for individuals and businesses.

2. Focus on expanding the tax base

One of the core objectives is to reduce overdependence on oil revenue by increasing tax collection from other economic sectors. This strategy aligns with the administration’s plan to diversify Nigeria’s economy.

3. Encouragement of compliance

The reforms introduce measures to make the tax system fairer, more transparent, and less prone to evasion.

By simplifying processes, the government hopes to boost voluntary compliance among taxpayers.

4. Support for investments and SMEs

The bill includes provisions to create a stable fiscal environment that attracts foreign and domestic investments.

Additionally, it introduces policies aimed at reducing tax burdens on small and medium-sized enterprises (SMEs), fostering growth in this crucial sector.

5. Revenue generation for national development

Tinubu’s administration views the bill as a critical step toward raising funds for essential sectors like education, healthcare, and infrastructure.

It also aims to address fiscal leakages by improving revenue collection mechanisms.

6. Controversies around regional impact

The bill has faced criticism, especially from northern lawmakers, who argue that it fails to address the unique challenges of their region, including insecurity and poor economic activity.

These concerns highlight fears that the reforms could disproportionately affect economically disadvantaged areas.

7. Aims to mitigate insecurity with improved revenue

The Presidential Committee on Fiscal Policy and Tax Reforms, led by Taiwo Oyedele, suggests that the additional revenue generated could be directed toward addressing insecurity and fostering economic stability in affected regions.