The Nigeria Extractive Industries Transparency Initiative (NEITI) has endorsed the proposed 2024 Tax Reform Bill, describing it as a critical step toward modernizing Nigeria’s tax framework and improving fiscal policy.
In a memorandum signed by NEITI’s Executive Secretary, Dr. Ogbonnaya Orji, and addressed to the National Assembly leadership and the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, NEITI highlighted the transformative potential of the Bill.
The memorandum, shared on X (formerly Twitter), emphasized that the reforms could align Nigeria’s tax system with global best practices, streamline administration, and expand the tax base.
Key Highlights of the Tax Reform Bill
The 2024 Tax Reform Bill is designed to address inefficiencies in Nigeria’s tax system. Its key features include:
- Broadening the Tax Base: Introducing measures to capture revenue from untapped sources, including the informal sector.
- Simplifying Tax Administration: Making compliance easier for businesses and individuals by streamlining processes.
- Global Alignment: Incorporating international best practices to attract foreign investments and boost economic growth.
- Enhancing Transparency: Strengthening mechanisms to improve accountability and reduce revenue leakages.
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NEITI’s Position
Dr. Orji commended the extensive research and consultations behind the draft legislation, stating that it reflects a deliberate effort to address Nigeria’s revenue challenges.
He noted that the reforms would improve revenue collection, transparency, and accountability, creating a more robust fiscal framework.
Challenges and Stakeholder Concerns
Despite its potential benefits, the Bill has faced opposition and calls for further stakeholder engagement:
- October 2024: The National Economic Council (NEC), chaired by Vice President Kashim Shettima, recommended withdrawing the Bill for additional consultations following concerns raised by state governors and traditional rulers about the proposed VAT distribution model.
- December 2024: President Tinubu directed the Attorney-General of the Federation to address genuine concerns about the Bill before its passage.
- January 2025: The Nigeria Governors’ Forum (NGF) expressed reservations about increasing the Value Added Tax (VAT) rate, urging the government to prioritize reforms that do not worsen economic challenges.
Remarks
NEITI’s endorsement underscores the Bill’s potential to transform Nigeria’s tax landscape. However, achieving widespread acceptance will require balancing stakeholder concerns with the need for comprehensive reforms.
With continued dialogue and collaboration, the 2024 Tax Reform Bill could pave the way for a more transparent, efficient, and globally competitive tax system.
