<\/p>\n
By George Mgbeleke<\/p>\n
The Senate at plenary on Wednesday, passed two out of the four tax Reform bills after subjecting the bills (comprising Nigeria Revenue Service Bill and the Nigeria Administration) into clause by clause consideration.<\/p>\n
Recall that the tax reform bills passed second reading in the Senate last November, and the House of Representatives passed them at third reading in March 2025, shortly before the lawmakers adjourned for the Easter and Eid-el-Fitr holidays.<\/p>\n
In his committee\u2019s report,Chairman Senate Committee on Finance, Senator Sani Musa said the committee members duly reviewed the provisions of the tax reform bills and conducted public hearings for public participation<\/p>\n
According to Senator Musa, about 64 organisations, including Civil Society Organisations (CSOs), attended the public hearing, and a majority of them supported the bills.<\/p>\n
On the sharing formula for Value-Added Tax, the senator recommended 10 per cent for the federal government, 55 per cent for state governments and the Federal Capital Territory, and 35 per cent for local governments.<\/p>\n
He also recommended retaining 10 per cent of funding for TETFUND, 10 per cent for NASENI, and 10 per cent for NITDA.<\/p>\n
Musa also noted that the committee included 5 per cent funding for cybersecurity and 10 per cent funding for defence.<\/p>\n
The senator, therefore, recommended the passage of the tax reform bills with the argument that it would improve economic growth, simplify tax compliance and boost investor confidence.<\/p>\n
Kebbi North Senator Yahaya Abdullahi supported the bills and urged his colleagues to support it.<\/p>\n
Details of the recommendations on the two Bills are as follows:<\/p>\n
Recommendations on the Nigeria Revenue Service (Establishment) Bill, 2025 (SB.584)<\/p>\n
The objectives of this Bill should be amended as follows:<\/p>\n
\u201cTo provide for a legal, institutional and regulatory framework for the administration of taxes and revenue accruable to the Government of the Federation, as prescribed by the National Assembly.\u201d
\n2. Clauses 4 of the Nigeria Revenue Service Establishment Bill 2025, – functions of the Nigeria Revenue Service should be amended as follows:<\/p>\n
a. Assess persons including corporations, companies and individuals chargeable with tax, other than individuals, resident in any state of the Federation or the Federal Capital Territory.
\nb. in collaboration with the relevant Ministries and Agencies of Government, subject to the approval of the Senate, review the tax regimes and promote the use of taxation to develop, stimulate and grow economic activities;
\nC. Adopt measures to identify, trace, freeze, confiscate or seize proceeds derived from tax fraud or evasion, in line with the provisions of this Bill;
\n3. Clause 7 (la) of the Nigeria Revenue Service Establishment Bill 2025 should be amended as follows:
\n“The Chairman of the Board who shall be the President; and (b) Executive Vice Chairman who shall be the head of the Revenue Service and subject to confirmation of the Senate”<\/p>\n
4 Clause 13 (2) of the Nigeria Revenue Service Establishment Bill 2025 should be amended as follows:
\n\u201cThe Secretary shall be a lawyer, or a chartered accountant or a chartered secretary who shall not be less than the rank of a Deputy Director”<\/p>\n
5. Executive directors should be appointed to the Board of the Service. We propose that the relevant clause be amended as follows:
\n\u201cThe President shall appoint six Executive Directors for the Service, each representing a geopolitical zone on rotational basis among the states in the zone in alphabetical order provided that the Executive Vice chairman and an Executive Director shall not come from the same state ”
\n6. The timeline for reporting by the service should not exceed 3 months after the end of the preceding year.<\/p>\n
9.3. Recommendation on the Nigeria Tax Administration Bill (SB. 585)<\/p>\n
10% to the Federal Government;<\/p>\n
55% to the State Governments and the Federal Capital Territory; and
\n35% to the Local Governments.
\n(2) The amount of VAT revenue standing to the credit of states and local governments shall be
\nDistributed among them on the following basis:
\nState Governments:
\nEquality \u2013 50%
\nPopulation -20%
\niii. Place of consumption -30%
\nb. Local Governments -70%
\ni. Equality -30%.
\nii. Population<\/p>\n
3. Change the word \u201cDerivation\u201d to \u201cplace of consumption\u201d to provide clarity
\n4. Penalties for the following offences were amended as follows:<\/p>\n
Clause 100 \u2013 Failure to register:<\/p>\n
(a) N100,000.00 in the first month in which the failure occurs; and
\n(b) N50,000.00 for each subsequent month in which the failure continues.<\/p>\n
Clause 101 \u2013 Failure to file returns:<\/p>\n
(a) N200,000.00 in the first month in which the failure occurs: and
\n(b) N50,000.00 for each subsequent month in which the failure continues<\/p>\n
Clause 102 \u2013 Failure to keep books:<\/p>\n
(b) on request by the relevant tax authority, fails to provide any record or book
\nPrescribed in this Act shall be liable to pay an administrative penalty of
\nIn the case of a person other than a company, N10,000.00, and
\nIn the case of a company, NI00,000.00.<\/p>\n
5. Clause 107 \u2013 Failure to remit tax deducted at source or self-account: A person who
\nFails to comply with subsections (1) and (2), shall on conviction for any of the offences under this section, in addition to the administrative penalty, be liable to a term of imprisonment not exceeding three years.
\n9.4. Recommendation on the Nigeria Tax Bill (SB. 586)<\/p>\n
1. Development Levy: Retain the funding of TETFUND, NASENI, NITDA, Cyber Security and NELFUND from the Development levy using the following sharing formula:<\/p>\n
i. Tertiary Education Trust Fund 50%:
\ni. Nigerian Education Loan Fund 15%
\niii. National Information Technology Development Fund – 10%;
\niv. National Agency for Science and Engineering Infrastructure 10%:
\nV. National Cybersecurity Funds – 5% and
\nvi. Defence Security Funds – 10%.<\/p>\n
2. Retain the VAT rate at 7.5%<\/p>\n
3. Company Income Tax rate 30%<\/p>\n
4. Clauses 157 to 163 which provide for Excise Duty on Services should be deleted.<\/p>\n
5. The provisions of the PIA that are proposed for amendments are outlined below:<\/p>\n
The Petroleum Industry Act, No 6. 2021 is amended by deleting<\/p>\n
(a) Part I-X of Chapter Four;<\/p>\n
(b) the Fifth and Sixth Schedules;<\/p>\n
(c) paragraphs 6, 9, 10, 11 and 12, of the Seventh Schedule: and<\/p>\n
(d) subparagraph 6 of paragraph 14 of Part IV of the Seventh Schedule:<\/p>\n
9.5. Having carefully considered the above, the Committee hereby recommends as follows:<\/p>\n
That the Senate do consider and pass the following Bills<\/p>\n
Joint Revenue Board (Establishment) Bill, 2025 (SB. 583).<\/p>\n","protected":false},"excerpt":{"rendered":"
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