Several experts from northern Nigeria have expressed strong support for the tax reform bills proposed by President Bola Tinubu, arguing that they will significantly enhance the region’s economy.
The reform bills include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill (which seeks to replace the Federal Inland Revenue Service, FIRS, with the Nigeria Revenue Service, NRS), and the Joint Revenue Board Establishment Bill.
While the Northern Governors Forum and various traditional leaders have opposed the bills, claiming they could harm the North’s economic interests, the experts at a recent town hall meeting in Abuja dismissed these concerns.
They emphasized that the reforms would instead foster growth and development across the region.
The event, held on Monday, was organized by the Coalition of Northern Civil Society Groups in partnership with Concerned Northern Professionals. It was chaired by Professor Malfouz Adedimeji, Vice Chancellor of the African School of Economics at the Pan-African University of Excellence, Abuja.
Dr. Mustapha Abubakar, a chartered accountant, spoke at the event and explained that the tax reform bills are designed to broaden Nigeria’s tax base, enhance compliance, and create sustainable revenue channels.
He highlighted the potential positive effects on the Northern economy, including increased government revenue, poverty reduction, and overall economic growth.
One of the key elements of the proposed reforms is the reduction of VAT distribution to the federal government from 15% to 10%, with a corresponding increase in the share allocated to state governments from 50% to 55%. According to Dr. Abubakar, this shift would make more funds available for development projects in the North, particularly in infrastructure, education, and healthcare.
The accountant also pointed out that the reduction of the company income tax from 30% to 25% in two phases would make it easier for businesses to thrive in the region, thereby fostering investment and job creation.
Barrister Maxwell Batusan, a staff member of the Kano State Internal Revenue Service, also spoke in support of the reforms. He noted that the bills would foster collaboration between the federal, state, and local governments, particularly through the establishment of the Joint Revenue Board, which would streamline tax administration and promote fairness in revenue distribution, a according to Daily Post.
Additionally, the proposed exemption of small businesses with annual turnovers of N50 million or less from income tax would encourage entrepreneurship and innovation in the North.
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, also highlighted some of the key benefits of the bills on Monday. Among the reforms, he mentioned that low-income earners (those earning N83,000 or less monthly) would be exempt from the Pay As You Earn (PAYE) tax. Furthermore, PAYE would be reduced for individuals earning less than N1.7 million annually. Additionally, households and individuals would no longer pay VAT on essential goods and services such as food, healthcare, education, and transportation.
“The bills are expected to have a positive impact on the Northern economy, potentially increase government revenue, reduce poverty, and promote economic growth and development.
“One of the key benefits of the bills is the potential to increase revenue generation for state and local governments in the north.
“The proposed reduction of VAT distribution to the federal government from 15% to 10% and the increase in the share of state governments from 50% to 55% will result in more funds being available for development projects in the North.
“This is expected to lead to improved infrastructure, education, and healthcare in the region. Another significant benefit of the tax reform bills to the North is the potential to promote economic growth and development.
“The proposed reduction of company income tax from 30% to 25% over two stages will make it easier for businesses to operate in the north, leading to increased investment and job creation,” the accountant said.
“The Joint Revenue Board Establishment Bill intends to establish the Joint Revenue Board, which will streamline tax administration and promote fairness and equity in the distribution of revenue.
“Additionally, the exemption of small businesses with annual turnovers of N50 million or less from paying income tax will provide a boost to entrepreneurship and innovation in the region.
“Overall, the tax reform bills have the potential to unlock the economic potential of the north and promote sustainable development in the region,” Batusan said.
