Tax reforms: LCCI projects N3.2 trn non-oil revenues in two years

The Lagos Chamber of Commerce & Industry (LCCI) yesterday called for effective coordination among the federal, state, and local governments for the newly passed tax reform laws to be effectively implemented. The chamber, however, commended the federal government for the tax reforms, saying from a macroeconomic perspective, “The reforms are expected to impact four major […]

The Lagos Chamber of Commerce & Industry (LCCI) yesterday called for effective coordination among the federal, state, and local governments for the newly passed tax reform laws to be effectively implemented.

The chamber, however, commended the federal government for the tax reforms, saying from a macroeconomic perspective, “The reforms are expected to impact four major areas: inflation, trade competitiveness, tax compliance, and investor confidence.”

Daily Trust reports that the four bills, including the Nigeria Tax Bill (Ease of Doing Business), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill recently passed by the National Assembly were signed into law on Thursday last week.

“These reforms, passed after extensive stakeholder consultations, mark a significant milestone in Nigeria’s journey toward a more transparent, efficient and growth-aligned fiscal framework,” the LCCI observed.

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While highlighting some details of the Acts, it said, with full implementation, the non-oil tax revenues could be increased by N3.2 trillion over the next two years, pushing the tax-to-GDP ratio towards 12% by 2027.

Establishing a single taxpayer ID, risk-based audit protocols, time-bound refund mechanisms, and taxpayer protection instruments such as the Office of the Tax Ombudsman should broaden the tax base while reducing the informal sector’s dominance,” the LCCI Director-General, Dr. Chinyere Almona, said.

She stated that the potential impact of inflation is twofold, saying, “In the short term, as businesses re-price, the broader tax net and initial compliance adjustments may trigger a slight increase in core inflation, estimated between 40–60 basis points.

“However, in the medium term, the reduction of tax inefficiencies and a shift from monetary financing to sustainable revenue should help ease price pressures,” she added.

The statement added, “The tax laws will also significantly improve Nigeria’s trade competitiveness.  With the introduction of a unified filing system and streamlining state and federal tax processes, businesses could see compliance time fall by up to 40%, effectively reducing transaction costs and supporting Nigeria’s export competitiveness under the African Continental Free Trade Area (AfCFTA).

A better streamlined tax system is a factor in attracting foreign direct investment (FDI).

“Tax compliance is another area where the reforms are poised to deliver tangible gains. Nigeria’s tax-to-GDP ratio, currently at 7.9%, is among the lowest in sub-Saharan Africa.”

From an investment standpoint, the chamber further stated that the reforms “Offer the predictability and transparency that domestic and foreign investors seek.”