In a significant move towards reforming Nigeria's tax system, the House of Representatives has approved several key tax reform bills proposed by President Bola Tinubu. This decision followed a meticulous review and approval of the report submitted by the House Committee on Finance, chaired by Hon. James Faleke. The approved bills aim to modernize tax administration, enhance revenue generation, and ensure a fairer tax system for all Nigerians.

Hon. James Faleke assured the public that these tax reforms are designed to benefit all citizens. Speaking after the House adopted the report on the four tax reform bills, Faleke emphasized that extensive consultations were conducted before finalizing the bills. The bills include: the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill. First introduced on October 8, 2024, the bills initially faced controversy, particularly regarding the sharing formula for Value Added Tax (VAT), which led to a temporary suspension of debates.

Despite calls from the National Economic Council (NEC) to withdraw the bills for further consultations, President Tinubu insisted that all concerns be addressed within the National Assembly. Following the House's consideration, the bills are now ready for their third reading before final passage. Faleke noted that all contentious issues were thoroughly examined and resolved during a six-day retreat by the committee.

Key highlights of the approved bills include:

Additionally, the House has decided to maintain the current VAT rate at 7.5%. The VAT distribution formula will be based on 50% equality, 20% population, and 30% consumption, as proposed by the Nigerian Governors’ Forum (NGF). Contributions towards NASENI and NITDA will be reinstated, ensuring continuous funding from the Development Levy.

Other significant amendments include:

• Exempting military personnel from Pay-As-You-Earn (PAYE) income tax.
• Increasing the turnover threshold for small businesses.
• Reducing corporate income tax for companies engaged in petroleum operations.
• Exempting specific agricultural businesses from taxes for the first five years of commencement.

Speaker Tajudeen Abbas commended the Ad-hoc Committee on Tax Reform for their extensive work, emphasizing that the reports reflect a national consensus on tax reforms. Hon. Alhassan Ado Doguwa, Leader of the Northern Members’ Caucus, assured that the bills have been given a human face, addressing concerns raised by various sections of the Nigerian people.

These tax reform bills represent a comprehensive effort to modernize Nigeria’s tax system, promote economic growth, and ensure a fairer distribution of resources.