By Milcah Tanimu
The Nigerian Presidency recently addressed concerns from Northern Governors, assuring them that the proposed tax reforms aim to benefit all regions. Designed to unify tax administration and simplify obligations, the reforms strive to create fairness across Nigeria’s states.
Bayo Onanuga, Special Adviser on Information and Strategy, clarified that these changes will consolidate tax processes without increasing rates. The reforms also focus on reducing redundancies and enhancing cooperation between federal, state, and local authorities.
The tax reform proposal includes four main bills:
1. Nigeria Tax Bill: Simplifies and reduces multiple taxation for businesses and individuals.
2. Nigeria Tax Administration Bill: Harmonizes tax administration across all jurisdictions for ease of compliance.
3. Nigeria Revenue Service Bill: Renames the Federal Inland Revenue Service (FIRS) to reflect its mandate across Nigeria.
4. Joint Revenue Board Establishment Bill: Creates a Joint Revenue Board to streamline cooperation across federal and state tax authorities and introduces a Tax Ombudsman for dispute resolution.
Despite opposition to the derivation-based VAT model, the Presidency emphasized its intent to establish a fairer system for all states. The reform bases tax collection on the place of supply or consumption, rather than remittance location, to reflect each state’s contributions accurately. By streamlining the tax framework, the reforms aim to foster job growth, avoid redundancies, and support equitable development across the country.
