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The House of Representatives on Wednesday, February 12, passed the consolidated tax reform bills for a second reading.
The four tax reform bills, originally sent by President Bola Ahmed Tinubu last year, were merged into a single bill before the House began deliberations on its general principles. The consolidation was moved by House Leader Prof. Julius Ihonvbere, following approval from Speaker Abbas Tajudeen.
The unified bill includes:
- A Bill for an Act to regulate the assessment, collection, and accounting of revenue for the Federation, States, and Local Governments, while defining the powers and functions of tax authorities (HB.1756).
- A Bill for an Act to repeal the Federal Inland Revenue Service (Establishment) Act, 2007, and enact the Nigeria Revenue Service (Establishment) Bill, empowering the service to oversee revenue assessment, collection, and accounting for the Federal Government (HB.1757).
- A Bill for an Act to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombud, aimed at harmonizing and resolving tax disputes in Nigeria (HB.1758).
- A Bill for an Act to repeal outdated tax laws, consolidate taxation frameworks, and introduce the Nigeria Tax Act, regulating income, transaction, and instrument taxation (HB.1759).
Leading the debate, Prof. Ihonvbere emphasized the urgent need to modernize Nigeria’s outdated tax system. He acknowledged the Nigerian Governors’ Forum for their contributions, particularly in refining the VAT-sharing formula, which had previously raised concerns.
The proposed reforms aim to simplify the tax system, promote economic growth, and provide relief for Nigerians. Key highlights of the bill include:
- Harmonization of multiple taxes to reduce the tax burden.
- Lower PAYE (Pay-As-You-Earn) tax rates to ease financial pressure on workers.
- Zero VAT on essential goods and services, including food, healthcare, and education.
- Incentives for low-income earners, ensuring a more inclusive tax system.
During the debate, the majority of lawmakers voiced strong support for the bill. Following extensive deliberation, Speaker Abbas Tajudeen put the motion to a voice vote, and the House overwhelmingly passed the consolidated tax reform bill for a second reading.
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