The Senate, on Thursday, passed the remaining two of the four tax reform bills proposed by President Bola Tinubu.
The two remaining bills passed were the Nigeria Tax Bill 2024 and the Joint Revenue Board Establishment Bill.
|
|
The bills were considered after the senators debated them at the Committee of the Whole.
The Senate President, Godswill Akpabio, announced passage of the bill after a majority of the senators supported it through voice vote.
|
|
|
|---|
PREMIUM TIMES reports that on Wednesday, the Senate debated and passed two of the tax bills: the Nigeria Revenue Service Establishment Bill and the Tax Administration Bill.
With the passage of the two remaining bills, the Senate has successfully passed the four tax reform bills proposed by President Tinubu.
Recommendations and adoptions
Initially, Section 146 of the Nigeria Tax Bill proposed a gradual increase of Value-Added Tax (VAT) from the current 7.5 per cent to 12.5 per cent through 2026, 2027, 2028, and 2029, while by 2030, the VAT will be raised to 15 per cent.
However, stakeholders including Trade Union Congress (TUC) raised objections to the proposal during public hearings. The committee, thereafter, reviewed the section and recommended that VAT should be charged at a rate of 7.5 per cent.
The bill also proposed a gradual reduction in statutory funding for agencies such as the Tertiary Education Trust Fund (TETFUND), National Information Technology Development Agency (NITDA) and National Agency for Science and Engineering Infrastructure (NASENI).
TETFund is primarily funded through a 2 per cent education tax on the assessable profits of registered companies in Nigeria. This funding supports the development of tertiary education by providing financial assistance to institutions for infrastructure, research, and faculty training.
NASENI, on the other hand, plays a vital role in scientific research, technological advancements and driving innovation across sectors.
Similarly, NITDA is central to Nigeria’s digital transformation, supporting ICT growth, capacity building, and technological infrastructure development.
Because of their significance, unions like the Academic Staff Union of Universities (ASUU) opposed the reduction of their funding during public hearings.
The committee reviewed the bill’s proposal and recommended that the statutory funding of the agencies should be retained as demanded by the stakeholders. The committee also recommended that there should be statutory funding for agencies like the National Cybersecurity and Defence Security.
All the agencies are now to share the 2 per cent profits of companies that used to be for TETFUND. The committee recommended 50 per cent of the statutory funding for TETFUND, 15 per cent for NELFUND, 10 per cent for NITDA, 10 per cent for NASENI, 5 per cent for cyber security and 10 per cent for defence security.
The committee also amended Clause 25 of the Joint Revenue Board Establishment Bill to address funding mechanisms for oversight and regulatory bodies of the Nigerian Tax system.
Specifically, the amendment states that the Tax Appeal Tribunal and the Tax Ombudsman’s Office will now be funded from the Consolidated Revenue Fund, subject to appropriations by the National Assembly.
READ ALSO: Tax Reforms: A Critical Imperative for Nigeria’s Economic Growth
Approvals
After deliberating the bills clause-by-clause, Mr Akpabio put the passage to a vote, and the majority of the senators supported it through voice votes.
Mr Akpabio subsequently approved the committee’s recommendations on the bills and the third reading of the bills was passed.
Thereafter, he constituted a 15-member committee to harmonise the Senate’s decision on the bills with the version passed by the House. Once harmonised, the unified bills will be transmitted to President Tinubu for assent.
The committee members are minority leader Abba Moro, Abdulaziz Yari (Zamfara), Enyinnaya Abaribe (Abia), Yahaya Abdullahi (Kebbi), Sani Musa (Niger), Adetokubo Abiru (Lagos), Joel-Thomas Onowakpo (Delta), Asuquo Ekpenyong (Cross-Rivers), Jimi Kuta (Taraba), Gbenga Daniel (Ogun), Osita Izunaso (Imo), Solomon Adeola (Ogun), Adams Oshiomhole (Edo), Hussaini Babangida (Jigawa), and Tahir Monguno (Borno).
Discover more from Premium Times Nigeria
Subscribe to get the latest posts sent to your email.
