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The Nigeria Economic Summit Group (NESG) has expressed strong support for the tax reform bills currently before the National Assembly, describing them as pivotal to achieving fiscal equity, enhancing revenue generation, and promoting economic transparency.
Speaking during a media briefing on Friday, NESG Chief Executive Officer Tayo Aduloju highlighted the reforms’ intent to redistribute the tax burden toward high-income earners and profitable businesses while shielding low-income workers and small enterprises.
Proposed Tax Reforms
President Bola Tinubu submitted four significant tax reform bills to the National Assembly on October 3, 2024:
- Nigeria Tax Bill 2024
- Tax Administration Bill
- Nigeria Revenue Service Establishment Bill
- Joint Revenue Board Establishment Bill
These proposals, designed to expand Nigeria’s tax base and simplify the tax system, have garnered support from various stakeholders. However, opposition has emerged from northern Nigeria, where political, cultural, and religious leaders argue that certain provisions may unfairly disadvantage their states. Despite these concerns, the reforms’ architects maintain that the bills are equitable and inclusive.
“The President’s instruction was clear: tax the harvest, not the seed,” Mr. Aduloju stated, emphasizing that the reforms aim to protect vulnerable groups while ensuring fiscal justice.
NESG’s Role in Shaping the Reforms
As a member of the Presidential Committee on Fiscal and Tax Reforms, the NESG has provided data-driven insights to assess the potential impact of the proposed laws. According to Mr. Aduloju:
“We have conducted extensive analytics and modeling to ensure these reforms grow the tax net, enhance tax justice, and simplify the tax system.”
Joseph Ogebe, NESG’s Head of Research and Development, highlighted findings from simulations using 2019-2020 Household Survey data, which showed substantial economic benefits for sub-national regions. Updated projections based on the 2022-2023 Nigeria Living Standard Survey, expected next year, will refine these insights further.
Legislative Process and Call for Review
While supporting the reforms, the NESG underscored the importance of addressing political sensitivities surrounding tax legislation. The group urged lawmakers to reopen public hearings to gather input from all geopolitical zones, ensuring equity and inclusivity.
“This is a federation, and geopolitics matter. The legislative process must balance economic imperatives with political realities,” Mr. Aduloju stressed.
The NESG also emphasized the need for transparency in tax collection, highlighting how the bills address long-standing challenges, including:
- Unauthorized non-state tax collectors
- Lack of mechanisms for VAT refunds
The reforms, according to Mr. Aduloju, should serve as a catalyst for broader discussions on fiscal federalism, even though they may not resolve all existing fiscal inequities.
A Step Forward
Despite acknowledging imperfections in the proposed laws, the NESG described them as a significant improvement over existing tax policies. The group urged all stakeholders to engage constructively, noting:
“If the final legislation fails to protect the working poor, expand the tax net, or enhance transparency, we will not hesitate to speak out.”
The NESG remains optimistic that with thorough legislative review and constructive dialogue, the tax reforms can lay the foundation for a more equitable and efficient fiscal system in Nigeria.
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