ABUJA — Senate President Godswill Akpabio has come under sharp criticism from the Nigeria Labour Congress (NLC), Trade Union Congress (TUC), and the Nigeria Employers Consultative Association (NECA) following his claim that only 30% of Nigerians pay taxes while demanding more from the government.
Akpabio made the controversial statement during the opening of a two-day public hearing on the 2024 Tax Reform Bills organized by the Senate in Abuja. He emphasized that tax reforms are vital for Nigeria’s future and must be approached with diligence.
However, the NLC, TUC, and NECA argue that widespread tax evasion is often fueled by the government’s lack of transparency and accountability, which discourages citizens from fulfilling tax obligations.
The public hearing also featured remarks from Senator Sani Musa, Chairman of the Senate Committee on Finance, who revealed that President Bola Tinubu has urged lawmakers to deliver practical legislation aimed at restructuring Nigeria’s tax system. Tinubu’s goal, according to Musa, is to avoid legal challenges and ensure that tax laws are beneficial and efficient.
Stakeholders Voice Support for Tax Reform
Several stakeholders, including the Nigerian National Petroleum Company Limited (NNPCL), Revenue Mobilisation and Fiscal Allocation Commission (RMFAC), Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), and the Arewa Think Tank, expressed strong support for the tax reform bills.
Institutions like the Institute of Chartered Accountants of Nigeria (ICAN), Chartered Institute of Bankers, and the Association of National Accountants of Nigeria (ANAN) also backed the reforms, underscoring their potential to streamline Nigeria’s tax system.
Contrary to rumors of regional opposition, the Arewa Think Tank, led by Muhammad Yakubu, dismissed claims that northern stakeholders are against the tax bills. “We have reviewed the benefits and fully support the reforms,” Yakubu affirmed.
The proposed reforms include four critical bills:
- The Nigeria Tax Bill (NTB) 2024
- The Nigeria Tax Administration Bill (NTAB) 2024
- The Nigeria Revenue Service (Establishment) Bill (NRSEB) 2024
- The Joint Revenue Board (Establishment) Bill (JRBEB) 2024
These bills passed their second reading on November 28, 2024, and were referred to the Senate Committee on Finance for further review.
Akpabio Advocates for Fairer Taxation and Transparency
In his speech, Senate President Akpabio lamented Nigeria’s poor tax culture, stating that less than 30% of the population pays taxes despite demands for improved infrastructure, education, and security. He stressed that tax reforms are essential for national development and that a transparent tax system would encourage compliance.
Akpabio also called for modernization of outdated tax laws, some of which date back to colonial times, advocating for a more efficient, digitalized system that reduces administrative costs. He emphasized that revenue should be equitably distributed, highlighting issues where states hosting industries often see little benefit from the taxes collected.
“Tax compliance shouldn’t be a burden,” Akpabio said. “We need a system that’s fair, transparent, and efficient.”
Industry Leaders Applaud Tax Reform Efforts
NNPCL CEO Mele Kyari expressed enthusiasm for the reforms, stating that they would simplify Nigeria’s complex tax system and strengthen the oil and gas industry. “These reforms will make our operations more profitable and the tax system easier to navigate,” Kyari noted.
Similarly, RMFAC Chairman Dr. Mohammed Shehu endorsed the bills, stressing that they would enhance fiscal stability. However, he urged the Senate to address issues around unequal revenue distribution to sub-national governments.
The Supreme Council for Sharia in Nigeria also voiced support but highlighted concerns over specific sections of the Nigeria Tax Bill and the Nigeria Tax Administration Bill, urging the National Assembly to consider amendments that align with cultural and economic sensitivities.
Towards a Transparent and Inclusive Tax System
As Nigeria moves forward with its tax reform agenda, lawmakers emphasized the need for a transparent, fair, and efficient system that promotes economic growth and benefits all Nigerians.
Senator Sani Musa highlighted President Tinubu’s commitment to achieving meaningful tax reforms that align with global best practices while fostering local economic development.
“The ultimate goal is a tax system that drives investment, supports businesses, and improves the quality of life for Nigerians,” Musa concluded.
For more information on Nigeria’s tax reform and its potential impact, visit Federal Inland Revenue Service (FIRS)
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