As debates over Nigeria’s tax reforms intensify, many are left wondering how these changes will impact the country.
With concerns from state governors and various groups, one official is now explaining how these reforms could actually benefit the economy and bring growth to Nigeria’s states.
President Bola Tinubu’s Senior Special Assistant on Media and Publicity, Temitope Ajayi, has stepped forward to clarify the intent behind the controversial Tax Reform Bills.
These bills, which include the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, have sparked concerns across the nation.
Mixed Reactions To Tax Reform Bills
State governors, public institutions, and various stakeholders have raised objections, questioning their potential impact.
Ajayi, however, insists that the reforms are designed to benefit states, offering a pathway for greater economic stability and growth.
In a statement made during a recent appearance on Channels Television’s Townhall on Tax Reforms, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, explained that the primary aim of the bills was not to generate additional revenue, as some critics had suggested, but to address fundamental issues within the Nigerian economy.
“The objective is to fix Nigeria’s economy for shared prosperity,” Oyedele emphasised.
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How Tax Reform Bills Will Enrich States
However, in a tweet shared on Wednesday Ajayi explained “10 ways the Tax Bills will make states richer” as stated below:
1. The Federal Government will cede 5% out of its current 15% share of the Value-Added Tax revenue to states.
2. The tax reform bills will transfer income from the Electronic Money Transfer levy exclusively to states as part of stamp duties.
3. The bills seek to repeal obsolete stamp duty laws and re-enactment of a simplified law to enhance the revenue for states.
4. Under the new dispensation the tax bills will usher in, and states will be entitled to the tax of Limited Liability Partnerships.
5. When passed by the National Assembly, the tax reform bills will enable the state government to enjoy tax exemption on their bonds to be at par with federal government bonds.
6. Under the proposed tax reform, states will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income.
7. Integrated tax administration will provide tax intelligence to states, strengthen capacity development and collaboration, and scope of the Tax Appeal Tribunal to cover taxpayer disputes on state taxes.
8. The proposed tax laws grant powers for the Accountant-General of the Federation to deduct taxes unremitted by a government or Ministries, Departments and Agencies; and pay to the beneficiary sub-national government on personal income tax of workers of federal institutions in states.
9. The tax reform bills will serve as a “framework to grant autonomy for states internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism.”
10. Legal framework for taxation of lottery and gaming, and the introduction of withholding tax for the benefit of states.