FG targets more revenue from taxes as Tinubu sends 4 bills to N/Assembly

The federal government on Thursday initiated moves to reform the country’s tax reforms with new bills presented to the National Assembly. The four new bills sent to the two chambers of the National Assembly are aimed at giving legislative frameworks to some proposals of the Presidential Fiscal Policy and Tax Reforms Committee headed by Taiwo […]

The federal government on Thursday initiated moves to reform the country’s tax reforms with new bills presented to the National Assembly.

The four new bills sent to the two chambers of the National Assembly are aimed at giving legislative frameworks to some proposals of the Presidential Fiscal Policy and Tax Reforms Committee headed by Taiwo Oyedele.

Daily Trust learnt that the proposal, which also seeks to amend the Establishment Act of the Federal Inland Revenue Service (FIRS), is aimed at opening new revenue streams for the federal government.

Both chambers of the National Assembly received the four different executive bills from President Bola Ahmed Tinubu, seeking to reform the country’s tax system.

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But some experts who spoke to Daily Trust said the Tinubu administration was exploring various ways to increase revenue sources.

This is coming at a time the disposable income of the citizens was facing serious threats amid high cost of living occasioned by rising cost of energy and dwindling value of the naira.

 

What the bills stand for

One of the bills titled, “The Nigeria Revenue Service (Establishment) Bill, 2024, is seeking the National Assembly’s approval to change the name, Federal Inland Revenue Service (FIRS) to Nigeria Revenue Service (NRS).

In a letter read by the president of the Senate, Godswill Akpabio, during plenary yesterday, President Tinubu asked the lawmakers to repeal the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007.

Other bills transmitted to the National Assembly by the president are: the Nigeria Tax Bill, which seeks to provide a consolidated fiscal framework for taxation in Nigeria and the Nigeria Tax Administration Bill, which seeks to provide a clear and concise legal framework for the fair, consistent and efficient administration of all the tax laws to facilitate ease of tax compliance and reduce tax disputes.

Similarly, the president transmitted the Joint Revenue Board (Establishment) Bill, which aims at establishing the joint revenue board, the tax appeal tribunal and the office of the tax ombudsman for the harmonisation, coordination and settlement of disputes arising from revenue administration in the country.

Tinubu said: “I am confident that the bill, when passed, will encourage  investment, boost consumer spending and stimulate Nigeria’s economic growth.”     

A similar letter was read on the floor of the House of Representatives.

In his letter, the president maintained that these reforms align with his administration’s objectives of fostering economic growth by enhancing taxpayer compliance and strengthening fiscal institutions.

He expressed confidence that if enacted, these bills would stimulate economic activity and establish a more effective and transparent fiscal regime.

The president urged the House of Representatives to act swiftly, reiterating his faith in their commitment to advancing the nation’s legislative agenda.

The Oyedele-led tax committee had engaged various segments of the Nigerian society on the proposed reforms.

Among other things, the committee had proposed the harmonisation of over 60 taxes and eight levies across the three tiers of government, which one of the bills seeks to actualise.  

 The committee also proposed tax exemption for small businesses even as it assured that there was no intention to overburden Nigerians with new taxes.

In addition to that, the Executive Chairman of the FIRS, Dr. Zacch Adedeji, had hinted about the proposed Executive Bill to address what he called existing gaps in revenue collection, including providing a legal and regulatory framework for the operation of cryptocurrency.

He spoke during an engagement with the Senate and House of Representatives committees on Finance in Lagos.

He stated that the new law would capture crypto regulations and also address other gaps in the existing laws like the Stamp Duty, which has become outdated.

He said: “The plan first is to have the law that regulates it (cryptocurrency) and that is why we are here with the legislators which would be the base of charging as it’s done in other places in the world when you have this new innovation or system you just have to get ready for it. You can’t go away from it, you just have to plan to regulate it in such a way that it is not injurious to the economic development of Nigeria.”

 

‘Government looking for more money’

An Economist and Director, Centre for Economic Policy Analysis and Research (CEPAR), University of Lagos, Prof. Ndubisi Nwokoma, stated that the government was trying to generate more money with the proposed tax reforms.

He, however, cautioned that there should be value for whatever money that would be generated, saying the government has been fiscally in-disciplined.

Nwokoma also stated that the proposals must be based on the outputs of the Oyedele committee.

“I think the critical thing is that the government needs to put its fiscal policies in order. Fiscal policy over the past eight to nine years has failed.

“The government has been fiscally indisciplined and all they are trying to do now is to get more money to spend. The former Minister of Finance under President Muhammadu Buhari, was always singing this song that Nigeria had a revenue problem.

“For some of us, it is not totally true because it is not about revenue, we also have to look at the expenditure side which has been very lax. There is so much spending beyond what we are capable of generating. This whole issue about fiscal policy reform is basically trying to get more money and they want to see how to get more money.

“If you look at the African language, from the data Nigeria is under-taxed. If you look at the tax-to-GDP ratio, it is low in Nigeria compared to many other countries, so that is actually what they are trying to leverage on. They are not looking at the spending side, people are not getting value for the taxes they are paying; our roads are bad.

“State governments collect money from their states and also get money from Abuja, but you don’t see this reflected in the lives of their people,” he said.     

Nwokoma added that the government was targeting the ultra-rich and those not captured in the tax net.

But another economist, Abdullahi Aliyu, who works with a private company in Abuja, said government officials must live by example for any reform to work.

“You can only tax people that have taxable income. Companies are closing down and sacking workers because of the unfavourable business climate here.

“Government must address these existential problems first. And they must also show that what is being generated by different agencies is clearly being used for the benefit of all. It is wrong for the generality of Nigerians, including businessmen, artisans, industrialists, among others, to be subsidising the expensive lifestyle of few in the corridors of power,” he said.