New Tax Reforms Bill Sees Specific Nigerians Exempted From Income Tax.

Except there are last-minute changes, the Senate will pass a controversial tax reform bill today that sees only Nigerians earning above one million naira annually liable for income taxes. That is, this imminent bill exempts those earning below a million naira per annum from the tax net.

Unlike when the news of the bill was initially gaining fame, many lawmakers have now embraced the idea of the tax reforms. Many lawmakers have changed their positions following clarifications given by the Federal Government’s tax executive, including the Director General of the Budget Office, Taminu Yakubu; the Chairman of the Presidential Committee of Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele; and the Executive Chairman of the Federal Inland Revenue Services (FIRS), Zacch Adedeji.

During their appearance before the lawmakers yesterday, the tax executives stated, among other things, that the laws were intended to bring success rather than poverty and that individuals making less than one million naira annually would not be subject to income tax. Additionally, they stated that the Value Added Tax (VAT) sharing system, which benefits states like Lagos, will be examined and made more equitable. The debate on the tax bills would continue today, according to Senator Barau Jibrin (APC, Kano North), the Senate’s deputy president, who presided over yesterday’s plenary session.

After a series of heated debates and adjournments on the issue of the bill, all seemed to be brought to unison following an expert presentation by economic experts. These presentations on the tax reform bill considerably changed the mindset of lawmakers. Mr. Taiwo charmed the Senators. He was the mastermind behind the reform bills. He also added that it was passed to foster prosperity and not poverty, correcting a lopsided tax gain derivation.

He stated, “The committee proposes four major bills aimed at overhauling the tax system. The Nigerian Tax Bill seeks to harmonise major taxes into one piece of legislation, simplify tax processes, and propose exemptions for low-income earners.

“The Tax Administration Bill aims at establishing standards for tax administration, promotes the use of technology, and aims to streamline tax collection.

The Nigerian Revenue Service Establishment Bill proposes the establishment of a new revenue service to improve tax collection and coordination among agencies, while the Joint Revenue Board Establishment Bill aims to enhance collaboration among tax authorities and create a tax ombudsman to protect small businesses.