BREAKING: Reps Endorse Sweeping Tax Reforms, Hold VAT at 7.5%

The House of Representatives, on Thursday, deliberated on and adopted four significant tax reform bills after a thorough clause-by-clause review at the Committee of the Whole, presided over by Speaker Abbas Tajudeen.

TrackNews Media understands that with the approval secured, the bills are now set for a third reading on the next legislative day before final passage.

According to Daily Trust, most of the contentious provisions that had previously sparked debate were resolved by the committee overseeing the reports, ensuring a smooth adoption process.

One of the key clauses considered and adopted was the Value Added Tax (VAT) distribution formula, which now follows a structure of 50% based on equality, 20% on population, and 30% on consumption—an approach initially suggested by the Nigerian Governors’ Forum (NGF).

The House also dismissed the proposal for a gradual increase in VAT rates, opting instead to maintain the existing 7.5% rate.

Additionally, lawmakers voted to remove the term “ecclesiastical” from one of the clauses, replacing it with “religious” to avoid controversy.

Another critical decision was the approval of continuous funding for agencies such as TETFUND, NASENI, and NITDA through development levies.

The contentious clause on inheritance tax was also adjusted, clarifying that inheritance acquired before dissolution cannot be taxed.

The tax reform bills adopted by the House include:
1. A Bill for an Act to Provide for the Assessment, Collection, and Accounting of Revenue Accruing to the Federation, Federal, State, and Local Governments; Prescribing the Powers and Functions of Tax Authorities, and for Related Matters (HB.1756).

2. A Bill for an Act to Repeal the Federal Inland Revenue Service (Establishment) Act, No.13, 2007, and Enact the Nigeria Revenue Service (Establishment) Bill to Establish the Nigeria Revenue Service, Charged with Powers of Assessment, Collection, and Accounting for Revenue Accruable to the Government of the Federation, and for Related Matters (HB.1757).

3. A Bill for an Act to Establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombud for the Harmonisation, Coordination, and Settlement of Disputes Arising from Revenue Administration in Nigeria, and for Related Matters (HB.1758).

4. A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation, Enacting the Nigeria Tax Act to Provide for Taxation of Income, Transactions, and Instruments, and for Related Matters (HB.1759).