Tax expert reveals what Tinubu's Tax Reform Bill seeks to achieve

• President Bola Tinubu’s Tax Reform Bill has been hailed as a catalyst for Nigeria’s tax system
• Despite the opposition to the bill in some quarters, an expert has detailed the benefits of the bill to Nigeria’s economy
• Key components of the reform include the Nigeria Tax Bill, intended to reduce overlapping taxes

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

President Bola Tinubu's Tax Reform Bill has become a cornerstone of his administration's economic vision. It focuses on creating a unified and efficient tax system that promises to drive national growth. 

The bill, comprising four legislative components, targets multiple taxation, enhances tax processes, and aims to align Nigeria's tax system with global standards.

President Bola Tinubu to introduce a revolutionary tax system Credit: State House
Source: Getty Images

Key components of the bill

Key components of the reform include the Nigeria Tax Bill, intended to reduce overlapping taxes; the Nigeria Tax Administration Bill, which seeks to harmonise tax processes nationwide; the Nigeria Revenue Service (Establishment) Bill, which proposes renaming the Federal Inland Revenue Service (FIRS); and the Joint Revenue Board Establishment Bill, aimed at creating a Joint Revenue Board to streamline tax administration across the country.

Amidst all these components of the Tax Reform Bill, Legit.ng reported that the northern block had expressed scepticism over these reforms.

President Tinubu has strongly advocated the reform, appealing to northern governors to support the bill's progression. 

"This bill is not a regional matter but a national initiative," Tinubu stated, underscoring the impartial intent of the reform. "It is crafted to create a fairer, more effective tax system that uplifts all Nigerians, irrespective of their region."

What the 'Tax Reform Bill' seeks to achieve

Giving more insight into this bill, Arabinrin Aderonke Atoyebi, the Technical Assistant for Broadcast Media to the Executive Chairman of the FIRS, described it as one that aims to transform Nigeria's economic landscape by reducing tax complexities and establishing a transparent, equitable model. 

The reform seeks to boost compliance, generate increased revenue, and fund essential public services by simplifying tax burdens by simplifying tax burdens. Tinubu envisions a Nigeria where "businesses can flourish, investments are abundant, and citizens enjoy improved living standards," the bill marks a significant step in that direction.

She stated that one particularly significant aspect of the reform is its approach to Value-Added Tax (VAT) distribution. The bill proposes a consumption-based VAT derivation model, allocating revenue to where goods and services are consumed rather than produced. 

It will ease the complexities inherent in Nigeria's tax system

While a vital telecom firm might be in Lagos, the high consumer base would ensure VAT revenue benefits the north.

The bill seeks to ease the complexities inherent in the Nigerian tax system and strengthen it so individuals and businesses can fulfil their obligations.

She disclosed that the improvement will allow the government to finance quality-of-life improvements for Nigerians. She said it aligns with global best practices to make Nigeria alluring or investing.

Atoyebi stated, "The bill signals the beginning of an efficient, fair tax system where all citizens can prosper." 

Atoyebi emphasised the role of collaboration and dialogue in achieving this vision, adding that the time for change has come and that the country must be focused on realising it.

According to her, the bill shows the government's commitment to economic prosperity, efficiency and fairness as the country embarks on the journey.

President Tinubu and his team continue to advocate for the bill, seeing it as a foundation for national development and economic growth for all Nigerians.

FIRS rakes in N5.5 trillion in tax revenue in 6 months

Legit.ng earlier reported that the Federal Inland Revenue Service (FIRS) collected a total tax revenue of N5.5 trillion from January to June 2023.

The agency's realisation of this feat is coming even though Nigerians have been plagued by several economic hardships in the six months, including naira scarcity, inflation, fuel subsidy removal and high petrol prices.

According to a statement released by the agency on Thursday, Premium Times reported that the new record is the most extensive tax income collection the Service has ever seen in the first half of a fiscal year.

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Source: Legit.ng