Kehinde Fajobi
The Senate is poised to pass the controversial Tax Reform Bill on Thursday, following a series of intense discussions during Wednesday’s plenary session.
Deputy Senate President, Senator Barau Jibrin (APC, Kano North), who presided over the session, confirmed that debate on the tax bills would continue.
The bill will first undergo its reading, followed by an executive session, before the Senate proceeds to pass it after the third reading.
The tax reform bills had initially been slated for first reading on October 30, 2024, but were postponed due to the screening of ministerial nominees.
The bills were later omitted from the agenda ahead of the Senate’s three-week recess.
However, the Tax Reform Bill unexpectedly resurfaced during Wednesday’s plenary, leading to a heated exchange among lawmakers.
The bill was not initially listed in the day’s business, sparking frustration among Senators.
Senate Leader, Senator Opeyemi Bamidele (APC, Ekiti Central), raised a point of order, suggesting that experts on tax reform be invited to explain the bills.
He proposed inviting Tanimu Yakubu, Director-General of the Budget Office; Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS); and Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, to provide clarity.
Senator Jibrin supported Bamidele’s request, and approval was granted for the experts to speak.
However, former Deputy Senate Leader, Senator Abdul Ningi (PDP, Bauchi Central), objected, citing the Senate Standing Rules and arguing that non-Senators should not be allowed to speak unless their topics were listed on the Order Paper.
Senator Jibrin ruled in favor of inviting the experts, asserting that their presence was necessary for an open discussion.
This decision led to further disagreements, with former Senate Leader, Senator Ali Ndume (APC, Borno South), criticizing the procedure and insisting that a supplementary Order Paper should reflect the inclusion of the tax experts.
Ndume declared, “You can have your way, but I will have my say.”
Despite his objection, Ndume was ruled out of order, and the invited experts proceeded to present the details of the Tax Reform Bill.
Taiwo Oyedele explained that the proposed reforms aim to overhaul Nigeria’s tax system by simplifying processes and correcting tax distribution imbalances.
The reform includes four main bills: the Nigerian Tax Bill, the Tax Administration Bill, the Nigerian Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
Key proposals include eliminating minimum tax for loss-making companies, implementing a 15% effective tax rate for large companies, removing VAT on essential goods, and raising income tax thresholds for low-income earners.
Oyedele emphasized that the bills were designed to benefit low-income earners and small businesses, with exemptions for those earning less than N1 million per month.
The proposed reform also addresses the contentious issue of VAT revenue sharing, seeking a more equitable distribution among states.
Oyedele reiterated that the reforms are intended to update Nigeria’s tax laws, promote fairness, and improve efficiency in tax administration.
The committee urged Senators to support the passage of the bills to advance the country’s tax system.
On September 3, 2024, President Bola Tinubu submitted the tax reform bills to the National Assembly, following recommendations from the Presidential Committee on Fiscal and Tax Reforms.
Despite calls for wider consultation, President Tinubu affirmed on October 31, 2024, that the bills should proceed through the legislative process, ensuring public input during the hearing stage.