Nigeria Presidency Defends Tax Reforms as Northern Governors Raise Concerns

The Nigerian Presidency defends a new tax reform bill aimed at enhancing tax collection processes. Special Adviser Bayo Onanuga highlights the initiative's goal to streamline taxation, eliminate redundancy, and modernize the tax landscape amidst opposition from Northern governors regarding Value-Added Tax distribution.

The Nigerian Presidency is defending a proposed tax reform bill aimed at overhauling the country’s tax collection processes. Bayo Onanuga, Special Adviser to the President on Information and Strategy, clarified that these reforms were developed after an extensive evaluation of existing tax laws, to enhance efficiency and streamline tax operations throughout Nigeria.

Recently, the Federal Executive Council, chaired by President Bola Tinubu, approved several initiatives that are now under consideration by the National Assembly. These reforms encompass four key bills, including the Nigeria Tax Bill, which seeks to eliminate issues of multiple taxation and simplify tax obligations for both individuals and businesses, ultimately promoting a more competitive economy.

Another significant component is the Nigeria Tax Administration Bill (NTAB), which aims to standardize tax administration across federal, state, and local governments to facilitate easier compliance for taxpayers across the nation. Onanuga also mentioned that the proposed Nigeria Revenue Service (Establishment) Bill intends to rename the Federal Inland Revenue Service (FIRS) to better represent its role as the revenue authority for the entire federation.

Despite these efforts, the new derivation-based model for Value-Added Tax (VAT) distribution has faced pushback from governors of 19 Northern States. During a recent meeting of the Northern Governors’ Forum, concerns were raised about the potential effects of these proposed tax reforms, as highlighted by the Forum's Chairman, Governor Muhammed Inuwa Yahaya of Gombe State.