Organised private sector’s worried over tax reform, e-invoicing
The implementation of the tax reforms and e-invoicing aimed at harmonising revenue collection and strengthening tax compliance in the private sector is currently generating concerns among major stakeholders. President Bola Tinubu signed four finance bills into law aimed at restructuring the tax system, saying that the new laws will harmonise the revenue collection, reduce the […]
taxation
The implementation of the tax reforms and e-invoicing aimed at harmonising revenue collection and strengthening tax compliance in the private sector is currently generating concerns among major stakeholders.
President Bola Tinubu signed four finance bills into law aimed at restructuring the tax system, saying that the new laws will harmonise the revenue collection, reduce the tax burden on citizens and businesses.
The four new laws include Nigeria Tax Act, Tax Administration Act, Nigeria Revenue Service Act and Joint Revenue Board Act. The Nigeria Tax Act is aimed at consolidating Nigeria’s fragmented tax laws into a harmonised statute by reducing the multiplicity of taxes, eliminating duplication and enhancing the ease of doing business.
In the same fashion to improve tax compliance, the Federal Inland Revenue Service (FIRS) introduced the electronic invoicing solution (e-invoicing) aimed at revolutionising tax payment in the country.
The e-invoicing system, also known as the Merchant-Buyer Model, is aimed at making tax compliance easier, faster and more transparent for all categories of taxpayers.
Ahead of the implementation of the E-invoicing, the Federal Inland Revenue Service (FIRS) recently announced that 20 percent of large taxpayers have been onboarded into the electronic invoicing platform (e-invoicing).
The 20 per cent represents 1000 companies out of over 5000 companies targeted for onboarding ahead of the November 1, 2025 deadline.
Ahead of the implementation, the Nigeria Employers’ Consultative Association (NECA) has raised concerns over federal government agencies’ enabling Acts which empower them to introduce levies, saying this may hinder the effective implementation of the new tax reform.
In an interview with Daily Trust, the Director-General of NECA, Wale-Smatt Oyerinde noted that agencies such as Customs and some agencies have extant Acts which enable them to introduce new fees and levies.
He described the Acts which empower those agencies as a threat to the harmonisation drive of tax reform, calling the government to amend the enabling Acts to ensure effective harmonization.
He recalled the reintroduction of the 4 percent of the Free on Board (FOB) by the Nigeria Custom Service (NCS), citing that part of the ACT enabled it to introduce levy.
“The FOB is a part of the Customs, it’s also a part of the Act of Customs and many other agencies whose acts also give them power to charge levies, contributions or fees. And we are working with the Presidential Committee to ensure that the right things are done, not for the agency, but for the overall good of this country.
“So all those we have brought to the attention of the committee and they are working assiduously with the support of the President to make sure that all issues that may arise are resolved,” he said.
He commended the federal government for ordering a pause on the section 33 of the Financial Reporting Council (FRC) Act, saying agencies that will become a clog in the wheel of progress should be attended to.
“Why are the agencies created in the first place? And that’s the first query we have to ask ourselves. They are created to further the overall economic objective of the country. So at the point or at any point when their activities or the law creating them is contradicting the overall objective of this country, then there is a question mark on that law. And I really think we shouldn’t be shy of querying those processes,” he said.
Position on E-invoicing
He revealed that some private firms have identified downtime of the e-invoicing platform as one of their concerns, saying it portends a threat to their operations.
“We are currently collating the issues that our members have concerning the e-invoicing. The FIRS, has its reasons, probably to optimize operationalisation and maximise efficiency. But the people that will implement it, that it will affect, also have a reason, have a right to explain this is the challenges that we are currently facing,” he said.