The Tax reform bills sent to the National Assembly by President Bola Tinubu have created divisions between the Federal Government and some State Governors, as well as legislators and stirred its own controversy. The bills include: <\/p>\n\n\n\n
The Nigeria\nTax Bill seeks to repeal some existing laws on various taxes and provide a\nconsolidated legal framework for income tax, including Company Income Tax (CIT),\nPersonal Income Tax (PIT), Petroleum Profit Tax (PPT), Capital Gains Tax (CGT);\nValue Added Tax (VAT) and excise and stamp duties. Some of its proposals\ninclude the reduction of CIT rate from 30% to 25% over the next two years,\nintroduction of electronic invoicing and making CGT to be taxable as part of\nincome tax. Among others, the bill also proposes 0% VAT on food, education and\nhealthcare, and extension of tax reliefs to entrepreneurs and self-employed\nindividuals with regard to PIT. <\/p>\n\n\n\n
The second bill, the Nigeria Tax Administration\nBill aims to\nestablish a streamlined system for the collection and administration of taxes, which is expected to reduce duplication and\nenhance efficiency in Nigeria\u2019s taxation system. It includes the use of technology in tax administration. It also\nestablishes State Inland Revenue Services with autonomy in their financial,\ntechnical and administrative affairs. The bill among other things, stipulates\nthe provision of tax identification as a\npre-requisite for individuals involved in\nbanking, insurance and stockbroking to open new\naccounts or maintain existing accounts. In furtherance of this, it also grants\ntax authorities the power to automatically register and issue\ntax identification to taxable individuals who fail to apply\nfor it, with the obligation to inform these individuals of\ntheir registration.<\/p>\n\n\n\n
A key\nproposal of this bill is the distribution of VAT, for which the bill proposes\nas follows in clause 77: <\/p>\n\n\n\n
\u201cNotwithstanding\nany formula that may be prescribed by any other law, the net revenue accruing\nby virtue of the operation of chapter six of the Nigeria Tax Act shall be distributed\nas follows-<\/em> <\/em><\/p>\n\n\n\n (a) 10% to the Federal Government; <\/em><\/p>\n\n\n\n (b) 55% to the State Governments and the Federal Capital Territory; <\/em>and<\/em><\/p>\n\n\n\n (c) 35% to the Local Governments.<\/em><\/p>\n\n\n\n provided that 60% of the amount standing to\nthe credit of states and local governments shall be distributed among them on\nthe basis of derivation.<\/em>\u201d <\/em><\/p>\n\n\n\n The Nigeria\nRevenue Service Bill seeks to repeal the Federal Inland Revenue Service Act and establish the\nNigeria\nRevenue Service, with the responsibility of assessing, collecting and\naccounting for federal revenues. The bill provides a\nframework for collaboration among revenue agencies across the three tiers of\ngovernment including optional power to delegate tax collection functions among themselves.\nThe bill establishes the Nigeria Revenue Service as the authority empowered to\nadminister taxes and revenue under any law made by the National Assembly. In\naddition, it empowers the Accountant General of the Federation to deduct any\nunremitted revenue due from government or\nministries, departments and agencies (MDAs) from the\nbudgetary allocation or any other money accruing to such government or MDA and\nremit to the Nigeria Revenue Service Bill. <\/p>\n\n\n\n The Joint\nRevenue Board of Nigeria (Establishment) Bill\nestablishes the Joint Revenue Board, the Tax Appeal Tribunal and the\nOffice of Tax Ombud, for the harmonisation, coordination, promotion of the\nrights of taxpayers and tax dispute resolution. The Joint\nRevenue Board replaces the existing Joint Tax Board, with additional functions.\nThe bill establishes the Tax Ombud as an independent arbiter to conduct enquiries and institute legal\nproceedings on behalf of taxpayers against arbitrary fiscal policies. The Tax\nOmbud may also report agencies which fail to implement its recommendations to the\nNational Assembly or State House of Assembly, for oversight. <\/p>\n\n\n\n It appears\nthat the tax reform bills are aimed at a holistic overhaul of the current tax\nsystem in the country While some stakeholders and observers have lauded it as\nwelcome, others have expressed reservation for some of the proposals. <\/p>\n\n\n\n The House\nof Representatives held an interactive session on the tax reform bills on\nMonday, November 18. According to the Speaker of the House, Rt. Hon. Tajudeen\nAbbas, the session was designed to deepen our appreciation of the provisions, commence\nconstructive dialogue on contentious or controversial areas, and build the\nconsensus necessary to produce versions of the bills that align with the\ninterests of the executive, the legislature, sub-national governments, and the\nNigerian people.<\/p>\n\n\n\n The\nproposed derivation-based model for VAT\ndistribution, which would allocate tax revenue to the States where\ngoods and services are consumed, as opposed to where\ncompanies have their headquarters appears to be controversial. The\nNorthern Governors\u2019 Forum, rejected this proposal and the bills\naltogether, insisting\nthat the contents of the bills did not align with the interests of the North\nand other subnational entities. <\/p>\n\n\n\n The\nNational Economic Council chaired\nby Vice-President Kashim Shettima, recommended withdrawal of the bills to allow for\nbroader consultations and consensus-building.<\/p>\n\n\n\n However, some members of\nthe National Assembly who expressed opinions on the bills, stated that the proposals\nhave the potential to address longstanding challenges in Nigeria\u2019s tax regime,\nwhile others have assured that the bills will be considered in the light of\npublic input. <\/p>\n\n\n\n Some tax\nexperts and other stakeholders have expressed the view that the proposed\nreforms will further burden Nigerians with additional taxes, thereby defeating\nthe pronounced purpose of the bills and worsening the hardship in the country. <\/p>\n","protected":false},"excerpt":{"rendered":" The Tax reform bills sent to the National Assembly by President Bola Tinubu have created divisions between the Federal Government and some State Governors, as well as legislators and stirred its own controversy. The bills include: Nigeria Tax Bill Nigeria Tax Administration Bill Nigeria Revenue Service (Establishment) Bill Joint Revenue Board of Nigeria (Establishment) […]<\/p>\n","protected":false},"author":2,"featured_media":3119,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-3684","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/3684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/comments?post=3684"}],"version-history":[{"count":2,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/3684\/revisions"}],"predecessor-version":[{"id":3689,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/posts\/3684\/revisions\/3689"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/media\/3119"}],"wp:attachment":[{"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/media?parent=3684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/categories?post=3684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/placng.org\/Legist\/wp-json\/wp\/v2\/tags?post=3684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}