The Nigerian Senate has passed four Tax Reform Bills for a second reading, aimed at overhauling the country's tax system.
The legislation proposes to increase the Value-Added Tax (VAT) share for states to 55%, while reducing the federal government's share to 10%. Additionally, the bills suggest implementing zero VAT on exports and essential goods, as well as lowering corporate income tax from 30% to 25%.
Following the second reading, the bills were referred to the Committee on Finance for further legislative action. The committee is tasked with inviting stakeholders for a public hearing to address concerns and will report back to the Senate within six weeks.
Senate Leader Opeyemi Bamidele led the debate, emphasizing that these reforms are designed to simplify tax administration, alleviate burdens on small businesses, and streamline tax collection processes.
He noted that individuals earning at or below the minimum wage would be exempt from Pay As You Earn (PAYE) deductions, and small businesses with an annual turnover of ₦50 million or less would also be exempt from taxes.
Bamidele highlighted efforts to reduce double taxation by consolidating multiple taxes into a single development levy of 2%, which will support a new student loan scheme by 2030.
He argued that the proposed changes aim to enhance fiscal federalism and improve revenue generation across states.
Despite broad support for the bills, some lawmakers raised concerns about insufficient stakeholder consultation.
Senator Ali Ndume called for a withdrawal of the bills to allow for more comprehensive discussions with relevant parties. In contrast, other senators argued that public hearings would provide ample opportunity for input.
