President Bola Tinubu’s administration has been urged by the National Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) to implement significant tax reform measures, such as lowering corporation taxes to 19% and tying the Value Added Tax (VAT) to 7.5%.
Dele Kelvin Oye, the association’s national president, signed a statement containing this information.
The National Assembly is now considering tax reform bills that will gradually raise VAT rates from 10% in 2025 to 12.5% in 2026–2029 and 15% starting in 2030.
NACCIMA claims that lowering value-added and corporation taxes will increase government revenue and promote economic growth.
“We believe corporate taxes should be further reduced to 19% and VAT pegged at 7.5%. We believe this will grow the economy and result in higher tax revenues for the government. As a caveat to protect government revenues, each tax payer must not pay less than the preceding tax year.”
Oye bemoaned the persistent rift between the federal and state administrations, which has shown up as public disputes over money distribution. He pointed out that these interactions frequently took place in the media, ignoring the public’s and taxpayers’ basic interests.
“The disconnect mentioned above is further confirmed by the federal and state governments’ current media engagement in press releases and newspapers,” Oye said. “Without taking into account the public or taxpayer interest, the beneficiary parties receiving taxpayer funds compete with one another to secure a larger portion of taxpayer funds.”
Reforms Are Also Required In Other Sectors
Oye underlined that in order to unlock more development and income potential, industries like telecommunications, which make a substantial contribution to government revenues, need focused reforms.
The statement also urged the private sector to be more involved in tax reform talks with manufacturers, operators in free trade zones, and stakeholders in industries like telecommunications and aviation. The current strategy of utilising committees that “lecture taxpayers” without producing fruitful results was criticised by Oye.
As stated by NACCIMA, “Significant tax payers like the telecommunications sector who require reforms; which will result in increased tax revenues should not be ignored. There must be real dialogue with genuine concessions to be made by all parties. The private sector (Aviation, Telecommunications, manufacturers, Free Trade Zones, and other stakeholders must be engaged) in written communication. Committees that come to lecture tax payers are not giving positive outcomes. For better coordination, the outcome of these engagements can be forwarded to the National Assembly through the office of the ATTORNEY GENERAL as directed by Mr President.”
What To Note
- The Presidential Committee on Tax Reform, led by Mr. Taiwo Oyedele, a well-known fiscal policy expert, made suggestions that are reflected in the proposed 2024 Tax Reform Bills.
- The Nigeria Tax Bill (NTB), Nigeria Tax Administration Bill (NTAB), Nigeria Revenue Service Establishment Bill (NRSEB), and Joint Revenue Board Establishment Bill (JRBEB) are the four individual bills that make up the reform bills.
