The Senate has passed the second reading of four tax reform bills introduced by President Bola Tinubu, signalling progress in efforts to overhaul Nigeria’s fiscal framework.
The bills propose a revision of the value added tax (VAT) sharing formula, allowing states to retain a larger share based on consumption within their borders. They also aim to exempt essential goods and services—such as education, healthcare, transportation, and accommodation—from VAT, providing relief to low-income earners.
Sponsored by Senate Leader Opeyemi Bamidele, the bills have been forwarded to the Senate Committee on Finance for detailed review.
Senate President Godswill Akpabio instructed the committee to submit its findings within six weeks, urging them to consult widely with stakeholders, including the National Economic Council (NEC), Nigerian Governors’ Forum (NGF), and civil society organisations.
Chairman of the presidential committee on fiscal policy and tax reforms Taiwo Oyedele earlier briefed lawmakers on the bills, emphasising their goal of reducing the tax burden on 90% of Nigerian workers.
The four proposed bills—Nigeria Tax Bill 2024, Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill—were submitted to the National Assembly two months ago. A key provision includes reducing the federal government’s share of VAT from 15% to 10%, with state allocations adjusted to reflect the derivation principle.
Despite their objectives, the bills have faced criticism. The Northern Governors Forum argued that the VAT provisions could disadvantage the region and instructed northern lawmakers to oppose the measures.
The NEC, led by Vice President Kashim Shettima, also recommended a pause for further consultation. However, President Tinubu has insisted that any disagreements be resolved through legislative debate.
