Speaker of House of Representatives Abbas Tajudeen says the house will thoroughly scrutinise the tax reform bills to ensure they align with interests of Nigerians.

Mr Tajudeen stated this during a public hearing on the bills organised by the Special Committee on Tax Reform Bills on Wednesday in Abuja.

The bills are the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill and Joint Revenue Board Establishment Bill.

Mr Tajudeen said the House recognised the critical importance of the bills, the anxiety they had generated among Nigerians and the desire of the government to revamp the economy through improved tax system.

According to him, the tax reform bills have generated widespread debate in the media, public domain, and private discussions, reflecting their importance.

He reiterated that the bills aimed to diversify the revenue base, promote equity and foster an enabling environment for investment and innovation.

He said the President Bola Tinubu-led administration came up with the tax reforms, ostensibly to improve Nigeria’s tax-to-Gross Domestic Product (GDP) ratio by streamlining and broadening the tax base.

“However, as representatives of the people, I have continued to hold the view that we must approach these reforms thoughtfully, understanding their potential implications for every segment of the society.

“Taxes should be fair, transparent and justifiable, balancing the need for public revenue with the burdens they impose on individuals and businesses.

“The House will, therefore, scrutinise these bills thoroughly, ensuring they align with the best interests of our constituents and the nation at large.

“We owe this duty to Nigerians, and as the people’s representatives, we must always be accountable to them,” he said.

Mr Tajudeen urged all stakeholders on tax system to foster robust discussions and harvest the recommendations therefrom.

“In every modern state, taxes are the bedrock of public revenue, providing the resources required to deliver education, healthcare, infrastructure and security,” he said.

The speaker said that Nigeria was still struggling with a tax-to-GDP ratio of just six per cent despite being Africa’s largest economy.

“This is far below the global average and the World Bank’s minimum benchmark of 15 per cent for sustainable development.

“This is a challenge we must address if we are to reduce our reliance on debt financing, ensure fiscal stability and secure our future as a nation.

“Together, let us seize this opportunity to bring forth a tax system that serves the best interests of all Nigerians,” he said.

Mr Tajudeen explained that the hearing would help the House identify areas requiring amendment, clarification or improvement while also considering the compatibility of the bills with the constitution and other extant laws.

He urged all stakeholders to approach the public hearing with an open but critical mind, feel free to make insightful contributions and raise any concerns agitating their minds about the bills.

Earlier, Chairman of the committee, James Faleke (APC-Lagos), highlighted the need for urgent tax reforms in the country.

Mr Faleke recalled that in 2023, data from the International Monetary Fund (IMF) showed that Nigeria’s tax-to-GDP ratio was approximately 9.4 per cent compared to South Africa’s 21.6 per cent, Kenya’s 14.1 per cent and Senegal’s 19.1 per cent.

He also said that in 2023, the total taxes or levies collected by the federal, state and local governments was ₦26.03 trillion.

The lawmaker said that the Joint Tax Board (JTB) only stated that about 35 million Nigerians pay tax, while only nine per cent of companies registered in Nigeria were captured in the tax net.

“This imbalance is unsustainable if we are to adequately fund critical infrastructure needed to build the Nigerian economy to a desirable level.

“Experts have estimated that Nigeria requires $3 trillion (₦1.8 quadrillion) over the next 30 years, which is equivalent to $100 billion, annually to bridge its infrastructure deficit.

“However, our internally generated revenue (IGR) falls significantly short of this amount, leading the government to borrow substantially in order to bridge the funding gap.

“This reality highlights the urgency of implementing tax reforms that will simplify and enhance revenue collection, reduce reliance on borrowing and drive sustainable development,” Mr Faleke said.

For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Inner Konsult Ltd www.innerkonsult.com at Lagos, Ogun state Nigeria offices.
You can also reach us via WhatsApp at +2348038460036.