Senate passes all four key tax reform bills proposed by President Tinubu

The Nigerian Senate has completed legislative action on President Bola Ahmed Tinubu’s comprehensive tax reform agenda, passing the final two of four critical tax-related bills on Thursday during plenary.

This marks a significant step forward in the administration’s ongoing push to modernize the country’s tax system and enhance revenue generation.

The two remaining bills—the Nigeria Tax Bill 2024 and the Joint Revenue Board Establishment Bill—were debated, amended, and passed following robust deliberations by the lawmakers.

Their passage comes just a day after the Senate approved the first two bills in the package: the Nigeria Revenue Service Establishment Bill and the Tax Administration Bill.

With all four bills now passed, the next phase involves harmonization with the House of Representatives. A conference committee will be established to reconcile any differences in the versions passed by both chambers. Once the unified texts are finalized, they will be transmitted to President Tinubu for assent.

Senate President Godswill Akpabio, who presided over the session, hailed the passage as a milestone in Nigeria’s legislative journey toward fiscal reform.

“These bills will strengthen governance, improve transparency, and increase compliance across our tax systems,” Akpabio said.

He also emphasized that the reforms are crucial for enhancing administrative efficiency and boosting national revenue.

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The tax reform bills are central to President Tinubu’s Renewed Hope Agenda, an economic strategy aimed at reshaping Nigeria’s fiscal landscape, promoting transparency, and expanding the federal revenue base.

In a significant decision during Wednesday’s plenary, the Senate rejected a proposal to raise Value-Added Tax (VAT) from 7.5% to 10%, choosing instead to retain the current rate.

The upper chamber, however, expanded VAT input claims to include fixed assets, administrative expenses, and overheads, providing relief to businesses and improving the tax credit structure.

The Senate also voted against proposals to phase out funding for several key federal agencies, namely: Tertiary Education Trust Fund (TETFUND); National Information Technology Development Agency (NITDA); National Agency for Science and Engineering Infrastructure (NASENI)

Rather than cut off funding, lawmakers introduced a 4% development levy to sustain support for these institutions. The distribution formula for the levy is as follows: TETFUND – 50%; Nigerian Education Loan Fund – 15%; NITDA – 10%; NASENI – 10%; National Cybersecurity Fund – 5% and Defence Security Fund – 10%

Akpabio warned that discontinuing financial support to these strategic agencies could significantly hinder advancements in education, innovation, and national security. “These institutions are critical drivers of our human capital development and technological progress,” he said.

With legislative work completed on all four bills, attention now shifts to the conference committee, which will work to align the Senate’s versions with those passed by the House of Representatives.

The harmonized bills will then be submitted to President Tinubu for signing into law.

This marks one of the most ambitious tax reform efforts in Nigeria’s recent history and underscores the Tinubu administration’s commitment to economic transformation through structural change.