Nigerian senators have commenced debate on the tax reform bills proposed by President Bola Tinubu.
The deliberation, during the plenary, began at 2:35 p.m. after the senators returned from a closed-door session which lasted for about two hours.
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Consideration of the tax reform bills was the only item listed on Wednesday’s order paper of the Senate.
The tax reform bills passed second reading in the Senate last November, and the House of Representatives passed them at third reading in March 2025, shortly before the lawmakers adjourned for the Easter and Eid-el-Fitr holidays.
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Following the second reading in the Senate, the bills were referred to the Senate Committee on Finance, chaired by Niger East Senator Sani Musa, for detailed review and public consultation. The committee conducted multiple public hearings, where a majority of stakeholders voiced support for the reforms.
On Tuesday, Mr Musa submitted the committee’s final report to the Senate for adoption and consideration of the bills.
Upon reconvening after the closed-door session, the Senate Leader, Opeyemi Bamidele, announced the tax bills for consideration.
The finance committee chairman, thereafter, led the debate on general principles of the tax reform bills during the plenary by presenting the committee’s report.
Mr Musa said the committee members duly reviewed the provisions of the tax reform bills and conducted public hearings for public participation.
He said about 64 organisations, including Civil Society Organisations (CSOs), attended the public hearing, and a majority of them supported the bills.
On the sharing formula for Value-Added Tax, the senator recommended 10 per cent for the federal government, 55 per cent for state governments and the Federal Capital Territory, and 35 per cent for local governments.
He also recommended retaining 10 per cent of funding for TETFUND, 10 per cent for NASENI, and 10 per cent for NITDA.
Mr Musa also noted that the committee included 5 per cent funding for cybersecurity and 10 per cent funding for defence.
The senator, therefore, recommended the passage of the tax reform bills with the argument that it would improve economic growth, simplify tax compliance and boost investor confidence.
Kebbi North Senator Yahaya Abdullahi supported the bills and urged his colleagues to support it.
The tax bills
The tax reform bills were drafted by the Presidential Committee on Fiscal Policy and Tax Reforms. The bills are: the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
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These proposed laws aim to adjust the Value-Added Tax (VAT) revenue-sharing formula and introduce tax exemptions for Nigerians earning the minimum wage or below.
Since their transmission to the National Assembly on 3 October 2024, the tax reform bills have generated significant debate, particularly regarding their regional implications.
Some lawmakers from Northern Nigeria and members of the Northern Governors Forum expressed concerns that the VAT component disproportionately benefits some regions over others. In response, the forum directed its representatives in the National Assembly to oppose the bills.
Despite these objections, the Nigeria Governors’ Forum (NGF) expressed strong support for the reforms after engaging with the president’s economic team.
Meanwhile, senators from the South-east indicated the need for further consultations with their governors and stakeholders, while South-south senators warned against introducing ethnic or regional biases into the debate.
M Akpabio had assured that the National Assembly would conduct a thorough review and ensure the passage of bills that benefit the entire country.
More details will be provided in subsequent reports.
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