Economists highlight key changes to Nigeria’s tax reform bills, giving support
Economists highlight key changes to Nigeria’s tax reform bills, giving support
Economists Bismarck Rewane and Biodun Adedipe have expressed optimism regarding the tax reform bills currently before the National Assembly.
They shared their views on the bills during the FirstBank Nigeria Economic Outlook 2025 event, which took place in Lagos on Wednesday.
The theme of the event was ‘Nigeria 2025: Path to Economic Rebound & Recovery.’
In October, President Bola Tinubu sent four tax reform bills to the National Assembly for consideration.
The proposed bills include the Nigeria Tax Bill 2024, which aims to establish a comprehensive fiscal framework for tax regulation, and the Tax Administration Bill, which seeks to provide a clear and concise legal structure for managing taxes in Nigeria to reduce disputes and enhance efficiency.
Other bills include the Nigeria Revenue Service Establishment Bill and the Joint Revenue Board Establishment Bill, which propose the creation of a tax tribunal and a tax ombudsman to address tax-related matters.
Rewane, the Managing Director of Financial Derivatives, shared his thoughts on the bills and their potential impact.
“Basically, the Nigerian government is focused on revenue. They need to increase the revenue-to-GDP ratio, and so, as long as it is easy to administer, that is the two things they consider. But the problem with revenue-intensive taxes is that, by nature, they are regressive. Therefore, you’re going to have this sales tax, VAT. It also takes money from consumers and gives it to the government.
“Secondly, what does the government do with the money? Is it transparent? Is it efficient? Is it adding to productivity and output by doing certain things? Is the government multiplier as efficient as the investment multiplier? I think that is key. The local governments are going to be important in this new dispensation. It’s a policy announcement that must be backed by institutional reforms. We must curtail government profligacy,” he stated.
Biodun Adedipe, another economist, highlighted two key aspects of the tax reform bills during the panel discussion at the Outlook event.
Economists highlight key changes to Nigeria’s tax reform bills, giving support.
“The first thing for me is the reduction in the number of taxes from about 62 to nine. Secondly, is the way proceeds have been shared under the current dispensation. That is also going to change, putting more money at subnational levels than we have now.
“So, if I drink Coca-Cola in Katsina, the VAT paid will not be attributed to Lagos because the headquarters of the company paying it is in Lagos. There will be a portion attributed to Katsina, where it was consumed. That’s the biggest shift, and it makes it more equitable,” he explained.
In his closing remarks, the Deputy Managing Director of FirstBank, Ini Ebong, expressed optimism that the insights from the event would guide the bank’s customers and other stakeholders in positioning themselves strategically for success.
He stated, “2025 promises to be a very interesting year of economic rebound and recovery. Over the years, First Bank has remained committed to being a partner in progress for Nigeria’s economic advancement.
“I I remind you that this is 130 years of actively supporting businesses and individuals in navigating challenges and maximising opportunities.
“Today’s discussions have not only provided valuable insights into the trajectory of the Nigerian economy but also highlighted the importance of collaboration between policymakers, private sector leaders, and other key stakeholders in achieving sustainable growth.”
