The Nigerian Senate has completed legislative work on four key tax reform bills proposed by President Bola Tinubu, passing the remaining two bills.
The Senate passed the Nigeria Tax Bill 2024 and the Joint Revenue Board Establishment Bill during plenary on Thursday.
With the passage of all four bills, the next step involves harmonization between the Senate and the House of Representatives through a conference committee, after which the unified versions will be sent to President Tinubu for signing into law.
Legislative Process and Senate Approval
The Senate began consideration of the comprehensive tax reform package on Wednesday, successfully passing two bills—the Nigeria Revenue Service Establishment Bill and the Tax Administration Bill.
During the committee of the whole, the bills were debated, revised, and ultimately adopted, with Senate President Godswill Akpabio formally announcing their passage.
Akpabio also confirmed that the Senate will set up a conference committee to harmonize the finalized versions with those approved by the House of Representatives, ensuring legislative consistency before transmitting them to President Tinubu for final approval.
Impact of the Tax Reform Bills
The tax reform measures are designed to modernize Nigeria’s tax system, streamline revenue collection, and enhance administrative efficiency. They form a core component of the federal government’s economic strategy under the Renewed Hope initiative, aimed at improving fiscal sustainability and creating a more structured tax framework.
- Once signed into law, these reforms are expected to strengthen governance, increase compliance, and boost national revenue, reinforcing the administration’s commitment to economic modernization.
- President Tinubu had originally transmitted the bills to the Senate as part of his administration’s broader efforts to overhaul Nigeria’s taxation system and improve revenue collection mechanisms.
Senate President Godswill Akpabio hailed the legislative progress, emphasizing the critical role of the bills in strengthening governance and enhancing tax administration.
What you should know
- At Wednesday’s plenary, the upper chamber rejected the proposed increase in Value-Added Tax (VAT) from 7.5% to 10%, opting to maintain the current rate while allowing VAT input claims on fixed assets, overhead costs, and administrative expenses.
- Beyond its decision to retain VAT at 7.5%, the Senate also rejected proposals to phase out funding for several critical government agencies, including the Tertiary Education Trust Fund (TETFUND), the National Information Technology Development Agency (NITDA), and the National Agency for Science and Engineering Infrastructure (NASENI).
Instead, the upper chamber introduced a 4% development levy to sustain funding for these agencies, with distribution structured as follows:
- TETFUND – 50%
- Nigerian Education Loan Fund – 15%
- NITDA – 10%
- NASENI – 10%
- National Cybersecurity Fund – 5%
- Defence Security Fund – 10%
Akpabio emphasized that these agencies play a vital role in human capital development and economic growth, warning that phasing out their funding could stifle advancements in education, technology, and national security.
