The Senate has resumed its debate on the Tax Reform Bills, a set of four legislative proposals aimed at reforming Nigeria’s tax system.
The bills propose a new sharing formula for Value-Added Tax (VAT) revenues, with state governments receiving 55% and the federal government receiving 10%.
The Tax Reform Bills are a significant step towards reforming Nigeria’s tax system and promoting economic growth and development. The bills contain several key proposals, including exemption from Pay As You Earn (PAYE) deductions for employees earning below N800,000.
Another key proposal in the bills is the zero VAT on exports and essential consumptions, such as food items, medical services, and educational fees. This proposal is expected to benefit individuals and businesses, particularly those in the manufacturing and export sectors.
The bills also propose a reduction in company income tax from 30% to 25%, which will last for at least two years. This proposal is expected to encourage businesses to invest and create jobs, thereby promoting economic growth and development.
In addition to these proposals, the bills aim to consolidate core tax statutes and related tax legislations to ease the administration of income taxes and levies. This proposal is expected to simplify the tax landscape and reduce the burden on small businesses.
The debate on the Tax Reform Bills featured contributions from several senators. Senator Ali Ndume expressed concerns about the timing and derivation of the bills. However, the Chief Whip of the Senate, Senator Mohammed Munguno, urged the Senate to pass the bills for second reading.
Munguno advocated that all areas of concern would be addressed at the public hearing stage. He emphasized the importance of passing the bills into second reading to enable the Senate Committee on Finance to conduct a thorough review.
The Senate unanimously passed the bills into second reading. The President of the Senate, Senator Godswill Akpabio, referred the bill to the Senate Committee on Finance for further consideration.
Akpabio advised the Committee to invite all stakeholders to the public hearing to address all areas of concern. The public hearing is expected to provide an opportunity for stakeholders to contribute to the review of the bills.
The Tax Reform Bills are expected to have a significant impact on Nigeria’s tax system. The proposed new sharing formula for VAT revenues is expected to benefit state governments, which will receive a larger share of the revenues.
The exemption from PAYE and zero VAT on exports and essential consumptions are expected to benefit individuals and businesses. The reduction in company income tax is expected to encourage businesses to invest and create jobs.
The consolidation of tax statutes is expected to simplify the tax landscape and reduce the burden on small businesses. Overall, the Tax Reform Bills are a significant step towards reforming Nigeria’s tax system and promoting economic growth and development.
The passage of the bills into second reading marks a significant milestone in the legislative process. The Senate Committee on Finance is expected to conduct a thorough review of the bills and engage with stakeholders to address all areas of concern.
The Tax Reform Bills are a key component of the federal government’s efforts to reform Nigeria’s tax system and promote economic growth and development. The bills are expected to have a positive impact on the economy and improve the business environment.
