The Chairman of the Federal Inland Revenue Service (FIRS), Zaccheus Adedeji, along with Budget Office Director General, Tanimu Yakubu and Presidential Fiscal Policy Committee Chairman Taiwo Oyedele, appeared before the Senate on Wednesday, November 27, 2024 and urged the lawmakers to support the four new tax reform bills that are aimed at improving Nigeria’s tax system.
The four bills are the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill and the Joint Revenue Board Establishment Bill.
These bills, they stressed, aim to simplify tax administration, replace outdated tax laws, and ensure fair taxation. They include all major taxes for individuals and businesses in Nigeria.
The team explained that the reforms would simplify Nigeria’s complicated tax system, benefit low-income earners and small businesses by exempting them from income tax and modernize tax laws, some of which date back to the colonial era. They also assured the lawmakers that the reforms are “pro-poor, pro-growth, and pro-efficiency.”
In his presentation, Oyedele outlined Nigeria’s economic difficulties as high poverty rates, with 133 million Nigerians living in multidimensional poverty, slow economic growth, high inflation, low government revenue, rising debt and inefficient tax collection, with Nigeria collecting far less in taxes compared to countries like South Africa and Kenya.
Oyedele pointed out that Nigeria taxes low-income earners disproportionately, making it hard for the poor to thrive. For example, Nigerians pay income tax on earnings as low as ₦30,000 per month, while South Africans and Kenyans are exempt at much higher income levels.
The reforms, according to the team, aim to reduce the tax burden on the poor and small businesses, encourage higher contributions from wealthy individuals and profitable businesses, harmonize over 60 existing taxes into fewer, more effective ones and align tax policies with Nigeria’s development goals, such as job creation and investment growth.
The team urged lawmakers to pass the bills, emphasizing their importance for Nigeria’s progress. Oyedele stressed that, “If we do not reform now, when will we? And if not us, who will?”
These reforms, they argued, would help Nigeria achieve a fairer and more effective tax system, boost revenue, and support economic growth.
