Tax Reform Bills: A New Dawn for Nigeria’s Economy? – the APGA National Chairman, Barrister Sly Ezeokenwa Echoes – Written by Nduka Anyanwu, SA- Media to The APGA National Chairman.
The recent tax reform bills transmitted to the National
Assembly by President Bola Ahmed Tinubu have sparked intense debate about their potential impact on Nigeria’s economy. As emphasized by the APGA National
Chairman, Barrister Sly Ezeokenwa, these bills are a significant step towards addressing the challenges of multi-layered taxation and complexities of the current tax system in Nigeria.
Key Provisions and Implications
The four tax bills, namely the Nigerian Tax Bill, Nigeria Tax Administration Bill, Joint Revenue Board Bill, and Nigeria Revenue Service Bill, aim to consolidate various legal frameworks relating to taxation, expand the country’s tax base, enhance tax compliance, and generate sustainable revenue streams for national development.
Some of the key provisions include:
1. Exemption from Income Tax: Small businesses with an annual turnover of ₦50 million or less are exempt from income tax.
2. Reduction in Companies Income Tax: The tax rate has been reduced from 30% to 27.5% for 2025 and 25% for subsequent years.
3. Tax Exemption for Low-Income Earners: Workers earning ₦800,000 annually and below will be exempted from taxes.
4. Zero-Rated Essential Items: Essential items such as food, education, healthcare will enjoy 0% Value Added Tax.
5. Tax Credits for Businesses: Businesses will be granted tax credits for VAT paid on their assets and all expenses incurred to produce Vatable goods and services.
Obligations for Non-Governmental Organisations (NGOs)
The tax reform bills also outline specific obligations for NGOs, including registration for tax purposes, filing of annual returns, and payment of VAT on services procured or consumed.
Challenges and Opportunities
While the tax reform bills offer considerable opportunities for revenue optimization, they also present some challenges and burdens. These include a
restrictive definition of small business, increased compliance burden, and potential barriers for low-income earners.
However, the reform’s success hinges on addressing regional concerns and fostering economic self-reliance. States should be allowed to leverage their unique resources to develop thriving local economies. The new VAT model offers an opportunity for states to innovate and focus on improving their internally generated revenue (IGR) through investments in infrastructure, education, and business-friendly policies.
Conclusion
In conclusion, the tax reform bills are a significant step towards creating a more efficient and effective tax system in Nigeria. While there are challenges and
burdens associated with the bills, the opportunities for revenue optimization and economic growth make them a welcome development. As the APGA National Chairman, Barrister Sly Ezeokenwa, emphasized, these bills have the potential to redefine governance in Nigeria and promote sustainable economic development.
