The Nigerian government is taking bold steps to overhaul the tax system, with four new bills currently under consideration by the National Assembly. These bills aim to simplify the tax landscape, reduce the burden on small businesses, and streamline how taxes are collected. On paper, it sounds like a game-changer: a future where paying taxes is straightforward, and the system works better for everyone.
But is it all as promising as it seems?
While some Nigerians are optimistic about the changes, others are questioning whether this is the right time, especially with the rising cost of living caused by increases in electricity and fuel prices. Are these reforms the relief we’ve been waiting for, or do they risk adding more pressure to an already stretched populace?
Let’s break down the proposed bills and what they mean for you.
Here’s a closer look at the four proposed bills and how they intend to reshape Nigeria’s tax system.
- The Nigeria Tax Bill 2024
- The Nigeria Tax Administration Bill
- The Nigeria Revenue Service (Establishment) Bill
- The Joint Revenue Board Establishment Bill
What Do the Bills Aim to Achieve?
Each of these bills is designed to make Nigeria’s tax system easier to understand and more effective. Let’s break them down.
1. The Nigeria Tax Bill 2024: Simplifying Tax Laws
One of the biggest issues in Nigeria’s tax system is the confusing overlap of multiple tax laws. Small businesses, for instance, often pay taxes to federal, state, and local governments, leading to unnecessary complexity. The Nigeria Tax Bill 2024 aims to solve this by merging all tax laws into one comprehensive framework.
For individuals, the bill proposes a more progressive Personal Income Tax (PIT) system, with reduced rates for low-income earners:
- First N800,000 – 0%
- Next N2.2 million – 15%
- Above N50 million – 25%
2. The Nigeria Tax Administration Bill: Streamlining Processes
Filing taxes can be a headache, with businesses navigating disjointed systems across various government agencies. This bill seeks to create a centralised and user-friendly process for tax registration, filing, and dispute resolution.
3. The Joint Revenue Board Establishment Bill: Strengthening Collaboration
This bill proposes replacing the ineffective Joint Tax Board (JTB) with a stronger Joint Revenue Board to improve coordination between federal and state governments. It also introduces a Tax Ombudsman to ensure fairness and protect Nigerians from unjust taxation.
4. The Nigeria Revenue Service (Establishment) Bill: Rebranding and Reorganising
This bill renames the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS) and ensures better revenue sharing between federal, state, and local governments. The proposed formula allocates 10% to the federal government, 55% to states, and 35% to local governments, giving states more resources to address local needs.
Optimism Meets Skepticism
The proposed changes have sparked mixed reactions across the country. While some believe the President is on the right track with these reforms, others argue that the recent hikes in electricity and fuel prices have already placed too much strain on citizens. Many feel the government should allow people time to recover from these economic shocks before introducing new taxes.
See some tweets below;
Again, the four tax reform bills sent by President Bola Ahmed Tinubu to the National Assembly is to help modernise our tax system to meet global standards
These bills are not inimical to any tribe and religion
Surprisingly, some people have not even gone through the bills, but… pic.twitter.com/oieMczfhLv
— David Offor (@DavidsOffor) November 15, 2024
Oga, there is the economics of the bill and the politics of it. It might make sense economically but how do you increase tax burden in a country with low productivity and high cost of living? That is a recipe for social upheaval. Kenya is a classic example.
— First (@First1009) November 6, 2024
You guys are irredeemable liars. Reform this and that. How has that helped the masses? Everything is about Tax Tax Tax. Small thing ask senator to sign Tax bill. That still won’t help shit as far as energy us still very expensive and the president and cronies are living large.
— Olushola Babalola (@OlusholaBabalo1) November 17, 2024
For more details on these tax reforms, check out the tweet thread by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, where he addresses the 10 most frequently asked questions.
Tax Reform Bills – 10 Most Frequently Asked Questions
It is not unusual for a major reform such as this to elicit keen interest from all stakeholders. This development is necessary to achieve the best outcomes that benefits all as it provides an opportunity for further…
— Taiwo Oyedele (@taiwoyedele) November 11, 2024
The post Everything You Need to Know About Nigeria’s Proposed Tax Changes appeared first on BellaNaija - Showcasing Africa to the world. Read today!.
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