Nigeria’s Tax reform bills aim to modernise tax administration
By Esther Adebayo
Nigeria’s proposed tax reform bills are set to revolutionise the country’s tax system, bringing in much-needed reforms since independence.
The bills, which include the National Tax Bill (NTB), National Tax Authority Bill (NTAB), Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill, aim to modernise tax administration, increase revenue generation, and promote simplicity in tax compliance.
According to the 36th edition of The Explainer, “low-income earners pay more taxes than the rich by proportion. In fact, many rich people and businesses do not pay income/profit tax because of many loopholes in various Nigeria’s tax laws and poor institutional framework to ensure tax compliance.”
The proposed tax reform bills seek to address this issue by exempting low-income earners from income tax and bringing the rich into the tax net.
As stated in the 36th edition, “NTAB Draws the Rich into Tax Net” by mandating banks and other financial institutions to submit quarterly reports to relevant tax authorities.
Specifically, “Section 28 of the bill mandates banks, insurance companies, stock broking firms and other financial institutions to submit quarterly reports to relevant tax authorities, specifying the names and addresses of new and existing individual customers whose cumulative transactions in a month amounts to N25 million or more.”
The bills also aim to reduce tax burdens on small businesses and promote transparency in tax administration.
As noted in the 36th edition, “the bills seek to entrench simplicity in the administration of corporate and specialised taxes on company profits which had been collapsed into a single lower development levy.”
Furthermore, the proposed tax reform bills provide for the establishment of a Tax Appeal Tribunal and an Office of the Tax Ombudsman to promote dispute resolution and taxpayer rights.
As stated in the 36th edition, “The tax ombudsman has powers to receive and investigate complaints lodged by taxpayers regarding the actions or decisions of tax authorities, agencies or their officials.”
The proposed tax reform bills have been hailed as a significant step towards modernising Nigeria’s tax system, increasing revenue generation, and promoting economic growth. If passed into law, the bills are expected to have a positive impact on the country’s economy and improve the lives of Nigerians.
