President Bola Ahmed Tinubu on Monday reaffirmed his administration’s focus on the Tax Reforms Bill currently before the National Assembly, stating that Nigeria needs changes to sustain its economy.
During a media chat, Tinubu described the reforms as necessary for improving the nation’s financial systems.
“Tax reform is essential. We cannot continue with outdated economic practices,” Tinubu said. “I am focused on delivering what Nigeria needs.”
He acknowledged the challenges the reforms may pose for some Nigerians but called for understanding. “It’s not going to be easy for everyone. However, change is necessary,” he added.
The Tax Reforms Bill proposes an overhaul of Nigeria’s tax collection and administration systems. Key provisions include changes to the Value Added Tax (VAT) revenue-sharing formula, exemptions for small businesses, and the establishment of bodies like the Joint Revenue Board and the Tax Appeal Tribunal.
One controversial aspect is the proposed VAT revenue-sharing model. Under the new arrangement, 60% of VAT revenue would go to the state where goods and services are consumed, 20% based on population, and 20% equally shared among all states. This differs from the current system, where revenue is distributed based on the location of corporate headquarters.
Proponents argue that the model emphasizes fairness by focusing on consumption patterns, while critics, particularly from northern states, argue it could widen economic disparities.
“This proposal could disadvantage northern states with lower economic activity,” said a northern governor, speaking anonymously.
The reforms also address inefficiencies in tax administration. “This is about creating a tax system that benefits all Nigerians,” said an economic analyst in Lagos. “States will need to enhance their internal revenue capacities instead of relying on federal allocations.”
The bill has sparked mixed reactions. Some see it as a step toward economic sustainability, while others are concerned about its impact on businesses and citizens.
“We need reforms, but they must consider disparities across states,” said Maryam Abdul, a businesswoman in Kano. “If implemented too quickly, it could create more problems than it solves.”
As debates continue, Tinubu’s administration faces challenges in addressing political resistance and public concerns. Despite this, Tinubu remains committed to the reforms, emphasizing their importance for Nigeria’s economic future.
“This reform is about securing the future for generations to come,” he concluded.
