Nigeria’s proposed tax law changes are expected to significantly increase revenue, according to Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
In an interview with Bloomberg on Friday, Oyedele emphasized that the reforms would double revenue as a share of the country’s Gross Domestic Product (GDP) within two to three years. “If we are moving from 9 percent to 18 percent, that means we are doubling it,” he stated.
The tax reform bills, submitted to the National Assembly by President Bola Tinubu on October 3, include the Nigeria Tax Bill, the Tax Administration Bill, and the Joint Revenue Board Establishment Bill. Key proposals include increasing Value-Added Tax (VAT) to 10 percent by 2025 and reducing Company Income Tax (CIT) to 27.5 percent from 30 percent. Personal Income Tax (PIT) for high earners would rise to 25 percent from 20 percent starting next year.
However, the Northern States Governors Forum (NSGF) has opposed the bills, citing concerns about regional interests and potential marginalization.
READ ALSO: Northern group backs Tinubu’s tax reform policies despite Govs’ opposition
Following a joint meeting with the Northern Traditional Rulers Council, the governors urged the National Assembly to reject any legislation harming their region’s interests.
In response to the opposition, the Presidency assured that the proposed laws aim to improve Nigerians’ lives and optimize existing tax frameworks, rather than disadvantage any part of the country. President Tinubu also urged the National Executive Council (NEC) to allow the legislative process to unfold, despite calls to withdraw the bills for further consultation.
Key Proposals:
– Increase VAT to 10 percent by 2025
– Reduce CIT to 27.5 percent from 30 percent
– Raise PIT for high earners to 25 percent from 20 percent
– Repeal the Federal Inland Revenue Service (FIRS) and establish the Nigeria Revenue Service
Oyedele emphasized the government’s commitment to the reforms, stating that elements could be tweaked but the overall plan would move forward. “The worst-case scenario is to drop the controversial issues,” he said. “There’s an outcome of it going ahead as proposed, or the one that goes ahead with modification, which is okay.”
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