House of Reps advances Tinubu’s Tax reform bills amid calls equity

The House of Representatives has passed four key tax reform bills for a second reading, marking a major step in President Bola Tinubu’s fiscal policy agenda aimed at overhauling Nigeria’s tax system.

The bills—Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill—were submitted by the presidency to streamline tax administration, eliminate multiple taxation, and enhance revenue collection efficiency.

After five months of consultations, lawmakers debated the bills on the House floor, with many emphasizing that the reforms would harmonize Nigeria’s complex tax structure, improve compliance, and create a framework for tax dispute resolution.

A key highlight of the bills is the establishment of an ombudsman system, designed to provide an independent mechanism for resolving tax-related disputes between taxpayers and the government in a timely manner.

Despite broad support for the reforms, some legislators expressed concerns over revenue mismanagement and lack of accountability. They urged the executive branch to ensure that increased tax revenue translates into tangible benefits such as infrastructure development, social services, and economic growth.

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“These tax reforms must not be another burden on Nigerians. We must ensure accountability in revenue utilization so that citizens feel the impact of improved tax collection,” said Hon. Aliyu Shehu, a lawmaker from Kano State.

While the tax reform bills enjoy support from many quarters, they have faced resistance from the Northern Governors’ Forum, led by Gombe State Governor, Muhammadu Inuwa Yahaya.

The governors opposed the proposed derivation-based Value Added Tax (VAT) distribution model, arguing that it would disproportionately benefit wealthier states while disadvantageing less-developed regions.

In a communiqué, the Northern Governors’ Forum stated: “We believe the proposed VAT distribution model undermines the interests of the North and other sub-national regions that rely on equitable revenue sharing for development.”

However, President Tinubu has encouraged governors and stakeholders to engage constructively in the legislative process rather than oppose the bills outright.

Addressing concerns over the VAT sharing formula, Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, emphasized that the current VAT model is flawed and needs reform not only for Northern states but for all geopolitical zones.

“Nigeria needs a tax system that incentivizes economic activity while ensuring fairness across regions. This reform is not about taking from one region to benefit another—it is about creating a tax structure that works for all,” Oyedele said.

With the second reading secured, the bills will now proceed to the committee stage, where lawmakers will fine-tune provisions before a final vote.

The legislative process will involve further stakeholder engagements, including tax experts, business leaders, and government agencies, to ensure that the final versions of the bills align with national economic objectives.