President Bola Tinubu recently transmitted four bills aimed at overhauling Nigeria’s tax system to the National Assembly, sparking discussions on the potential impacts on citizens. Concerns arose about whether these bills might raise tax rates, increasing financial burdens. However, proponents argue that the bills are designed to create a more efficient, supportive tax system, addressing long-standing issues like multiple taxation and supporting small businesses.
The four bills — the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill — translate recommendations from the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele, into a legislative framework. They aim to consolidate Nigeria’s tax regulations, moving disparate laws and tax provisions into one streamlined document known as the Nigeria Tax Act, making tax regulations simpler and more accessible to businesses and individuals alike.
Key provisions in the proposed Nigeria Tax Act include classifying businesses by size and providing tax reliefs accordingly. Companies with a yearly turnover below ₦50 million will be exempt from Companies Income Tax (CIT), doubling the previous threshold. This change supports President Tinubu’s promise to ease burdens on small businesses and encourage entrepreneurship.
Significantly, the bills also propose VAT exemptions on essential items like food, healthcare, education, transportation, and agricultural products, directly benefiting low-income Nigerians by reducing the cost of necessities. Additionally, VAT refunds for companies will now be processed within 30 days of paperwork completion, enhancing cash flow for businesses.
These reforms follow earlier moves by President Tinubu to reduce costs on imports of essential commodities, aimed at softening the economic adjustments. The proposed bills signal a push for long-term fiscal stability and a more supportive business environment, promising tangible relief for citizens and companies navigating the current economic landscape.
