VANGUARD
Yesterday, the Senate passed for second reading the Tax Reform Bills, a set of four legislative proposals. Among other things, they seek to increase the Value-Added Tax (VAT) distributable to states to 55 percent while reducing the Federal Government’s share to 10 percent.
The new legislative regimes also proposed zero VAT on exports and essential commodities, and to reduce company income tax from 30 to 25 per cent among others.
While the bills were referred to the Committee on Finance to carry out other legislative action, it was tasked to invite all the stakeholders to a public hearing to address all areas of concern and report back to the Senate in six weeks.
These far-reaching initiatives were contained in the lead debate of Senate Leader, Senator Opeyemi Bamidele on the Tax Reform Bills.
The Federal Executive Council, FEC, had proposed the Tax Reform Bills comprising the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024 and Nigeria Tax Bill, 2024.
The bills elicited interests among lawmakers and stakeholders across party lines, a situation that led the leadership of the Senate to invite Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele and Chairman, Federal Inland Revenue Service, Dr. Zacch Adedeji to brief its plenary.
Leading debate at the plenary, Bamidele reeled out far-reaching proposals contained in the Tax Reform Bills, which according to him, aim at simplifying the tax landscape, reducing the burden on small businesses and streamlining how taxes are collected.
Tax exemptions
On tax exemptions, Bamidele pointed out that those whose salaries are not more than the minimum wage are exempted from Pay As You Earn, PAYE, deductions.
He also said small businesses with annual turnover of N50 million or less “are equally exempted from payment of taxes,” a key pro-business initiative that encourages job creation; deepens ease of doing business and incentivises more investments.
