House of Reps advances Tinubu’s tax reform bills amid controversy

The House of Representatives has passed four tax reform bills sponsored by President Bola Tinubu for second reading, despite initial opposition from northern governors and opposition politicians.

The bills, which include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, aim to overhaul the country’s tax system.

However, concerns were raised over their potential conflicts with the 1999 Constitution and implications for taxation at the state level.

During Wednesday’s plenary session, lawmakers expressed mixed reactions.

Sada Soli, a member of the House, stressed the need for clarity on derivation principles to prevent legal ambiguities.

“We must ensure that the provisions align with constitutional mandates to avoid unnecessary disputes,” he stated.

Other lawmakers questioned the bills’ broad scope, which seeks to amend 40 existing tax laws.

They also raised alarms about multiple taxes, particularly a provision mandating that both buyers and sellers pay property transaction taxes.

“This could burden ordinary Nigerians and discourage investment,” one legislator warned.

Despite these reservations, the bills received backing from the Nigerian Governors’ Forum earlier this year after modifications to the proposed VAT distribution formula.

The revised plan allocates 30% of VAT revenue based on derivation, 50% distributed equally among states, and the remaining 20% according to population—marking a shift from the initial proposal of 60% derivation-based allocation.

The bills will now proceed to the committee stage, where lawmakers are expected to refine contentious provisions before a final vote.