FG Collaborates With Private Sector To Drive Tax Reform Benefits

The Federal Government, through the Presidential Fiscal Policy and Tax Reforms Committee, led by Taiwo Oyedele, has engaged the Organised Private Sector of Nigeria (OPSN) on the significance and urgency of implementing four proposed tax reform bills. These reforms are aimed at addressing pressing economic challenges while creating a conducive business environment.

The bills under review include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill.

Speaking at an interactive session in Lagos, Mr. Oyedele emphasized the importance of bold fiscal reforms in overcoming issues such as inflation, unemployment, poverty, public debt, and declining investments.

Key Features of the Tax Reform Bills

Comprehensive Overhaul:
The Nigeria Tax Bill seeks to repeal outdated tax acts, consolidate legal frameworks, and establish the Nigeria Tax Act for better taxation of income, transactions, and instruments.
Withholding Tax Adjustments:
Proposed regulations aim to exempt small businesses from withholding tax obligations and reduce rates for low-margin businesses. Farmers, manufacturers, and producers are also set to benefit from these exemptions, addressing tax evasion and avoidance.
Progressive VAT Reforms:
The Value Added Tax (VAT) reforms are designed to moderate inflation and protect low-income earners and small businesses. Basic consumption items like cereals, tubers, rent, transportation, and medical services, essential for low-income households, will remain unaffected to curb inflationary pressures.
Benefits to Households and SMEs:
- Low-income earners with annual incomes below ₦1 million will be completely exempt from taxes.
- Tax exemption thresholds for small businesses will increase from ₦25 million to ₦50 million annual turnover.
- SMEs will also enjoy exemptions from company income tax.

Collaboration with the Private Sector

Francis Meshioye, Chairman of OPSN and President of the Manufacturers Association of Nigeria (MAN), lauded the engagement, emphasizing that the private sector plays a vital role in economic growth. He urged stakeholders to maximize the benefits of the reform initiative.

Segun Ajayi-Kadir, Director-General of MAN, highlighted the ongoing challenge of multiple taxation, which has negatively impacted manufacturers. He noted that the tax reform bills provide an opportunity to redefine Nigeria’s business landscape, making it more competitive and profitable.

A Call for Fairness

The OPSN called for a fair and just tax system to promote voluntary compliance and ease of payment. They reaffirmed their commitment to paying taxes under a humane and transparent tax regime.

These reforms, part of President Bola Tinubu’s administration, aim to create a more sustainable and business-friendly economic environment in Nigeria.