Stakeholders including the Association of Capital Market Academics of Nigeria (ACMAN), Supreme Council for Shariah in Nigeria and the Association of National Accountants of Nigeria (ANAN) yesterday rejected the incremental increase in the Value Added Tax (VAT) as proposed in the tax reform bills.

This is as they also kicked against the proposal to stop funding of TETFUND, NASENI and NITDA with effect from 2030.

Also, the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) kicked against the move to impose taxes on Free Trade Zones across the country.

They made their positions known yesterday, while making their separate presentations at a public hearing on tax reform bills organised by the Senate Committee on Finance, chaired by Senator Sani Musa (APC, Niger).

Similarly, the Arewa Consultative Forum (ACF) has submitted its recommendations on the Tax Reform Bills to the National Assembly.

The pan-northern group highlighted concerns and proposed adjustments aimed at ensuring fairness and efficiency in Nigeria’s tax system.

The forum said its submission followed a comprehensive review conducted by a special committee of experts set up by its Board of Trustees to examine the potential impact of the reforms.

The four bills are: the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, the Joint Revenue Board Bill, and the Nigeria Tax Bill, which have been passed for a second reading by both the Senate and the House of Representatives.

chairman of the presidential tax reform committee, taiwo oyedele
chairman of the presidential tax reform committee, taiwo oyedele

In his presentation, President of ACMAN, Prof. Uche Uwaleke, said the proposal to increase VAT from the current 7.5% to 10% in 2025, 12.5% in 2026 and 15% by 2030 will increase costs of transactions in the Nigerian capital market and discourage investments.

“In this regard, ACMAN does not support any increase in the VAT rate at this time which has the tendency to compound the current inflationary pressure,” he said.

He, however, said that the association is in full support of Section 56 of the Nigerian Tax Bill which has proposed a gradual reduction in the income tax on total profits of large companies in Nigeria from the current 30% to 27.5% in 2025, and to 25% from 2026.

He said studies have shown that tax policies have a strong influence on the development of the capital market and by extension the economy of any country.

He said this reduction will go a long way in improving the business climate in Nigeria as the country’s CIT is one of the highest in Sub-Saharan Africa.

Also speaking, the representative of the Supreme Council for Shariah in Nigeria, Prof Ahmed Bello Dogarawa, said while the council supports the reform of the Nigerian tax system, it opposes the proposal for incremental increase in VAT rate as doing so will compound the wellbeing of the people.

He said the body rather proposes a reduction of VAT rate from 7.5% to 5% or at best, the current rate of 7.5% should be sustained.

The Council also proposed that the term “derivation” should be clearly defined to mean the actual location where consumption takes place.

The Shariah Council also proposed that the clause which seeks to stop the funding of TETFUND, NASENI and NITDA by 2030 should be expunged from the bills.

This is as the body also raised concerns over the clause on Inheritance Tax, urging the committee to expunge it.

The Association of National Accountants of Nigerian (ANAN) also expressed concern over the clause that seeks to stop the funding of TETFUND and two other agencies.

Representative of ANAN, Prof Abuchi Ogbuju, said scrapping TETFUND will negatively impact the quality of education in the country given the significant role the agency plays in funding interventions for tertiary institutions.

He said a visit to many public universities will show the physical developmental structures provided through TETFUND and wondered what will become of tertiary institutions should TETFUND be scrapped.

 

NACCIMA opposes imposition of taxes on Free Trade Zones

The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) in its presentation opposed the proposal targeting imposition of tax on Free Trade Zones in the tax reform bills, saying it drives multi billion dollars Foreign Direct Investments (FDI) from the country and lead to job losses.

The provisions outlined in the Nigeria Tax Bill 2024, seek to introduce minimum tax rates and remove long-standing tax exemptions for businesses operating within FTZs, a move seen as contradicting Nigeria’s industrialisation and investment objectives.

Speaking at the hearing, President of NACCIMA, Dele Oye, said the move will stifle economic activities in Free Trade Zones, urging the committee to delete the clause from the bill.

He said there are over 50 Free Trade Zones in the country, which he said, serve as economic hubs.

Oye said the proposed legislation will scare investors away from the country.

He argued that the assumption that operators in FTZs don’t pay taxes is not true, saying they are only exempted from paying income tax.

 

ACF’s recommendations

The ACF in its recommendations to the National Assembly emphasised that the proposed reforms would affect all regions of the country and not just the North.

National Publicity Secretary of ACF, Prof. Tukur Muhammad-Baba,  said in a statement yesterday, that copies of the report have been shared with the forum of northern state governors, traditional rulers, northern interest groups, relevant government agencies, and other stakeholders. Electronic copies were also made available to the public and the press.

Among the key recommendations, the ACF called for the retention of the current 7.5 percent Value Added Tax (VAT) rate, citing the economic hardships faced by citizens and businesses.

It also suggested improving VAT collection efficiency, formalising the informal sector, and using digital technology to expand the tax base while encouraging private sector investment.

The forum recommended that VAT on agricultural equipment be scrapped and suggested changing the terms “supply and supplies” in Chapter 6 of the Tax Administration Bill to “consumption or consumptions.”

The forum also urged “the clear definition of derivation with revenue distribution decided through consultations with states, local governments, and the Revenue Mobilisation and Fiscal Commission (RMFC).”

The ACF further proposed that all small towns and major cities should name their streets and number houses to make taxpayers more traceable.

It also recommended “setting annual upper limits on tax exemptions and waivers.”

The forum raised concerns over the concentration of power in the hands of the Chief Executive Officer and Chairman of the Board of Directors of the Joint Revenue Board.

Instead, it suggested appointing six Executive Directors representing federal character, nominated by the President and confirmed by the Senate, to replace the proposed eight Coordinating Directors.

The ACF also called for the retention of funding for TETFUND and NITDA through a restructuring of Section 69 of the proposed Nigeria Tax Bill, proposing a Development Levy to be shared with NASENI and the Education Loan Fund.

Also, the forum recommended replacing the term “ecclesiastical” with “religious” throughout the bills and removing Section 4(3) of the Tax Bill, leaving such matters to Sharia and customary laws. It also proposed allowing tax returns and account records to be prepared in local languages, not just English.

 

Edun, NNPC, RMFRC, others back bills

Meanwhile, a number of critical stakeholders yesterday expressed their support for the tax reform bills.

Among the stakeholders who spoke in support of the bills during the hearing are; the Minister of Finance and Coordinating Minister of Economy, Wale Edun, representatives of the Nigeria National Petroleum Company Limited (NNPCL), Institute of Chartered Accountants Association of Nigeria (ICAN), Revenue Mobilization, Allocation and Fiscal Commission (RMAFC), and Nigeria Upstream Petroleum Regulatory Commission (NUPRC), among others.

In his remark, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said there is a nexus between government revenues and provision of services for the people, adding that the key objective of the bills to broaden the tax base and engender efficiency in the tax system for better results.

In his presentation at the hearing, the Group Chief Executive of NNPCL, Mele Kyari, said the company is fully in support of the tax reform, given its benefits for the sector.

He said, “We are the largest tax payers in the country. We are the happiest people. Our industry has been battling multiple taxation.”

Kyari said with the proposed tax reforms, the issues around royalties incurred will be paid.

On its part, the chairman of RMAFC, Dr Mohammad Bello Shehu, said the commission was in support of the tax reform bills as they will increase revenue generation to the federal and subnational governments.

He, however, urged the committee to adopt the position of the Nigeria Governors Forum on the aspect of VAT distribution formula.

 

We ‘ll be thorough – Akpabio

The President of the Senate, Godswill Akpabio, while declaring the public hearing open, said the Red Chamber would be thorough as it is not in a hurry to pass the tax reform bills.

He said after collecting inputs from the public, the committee will thoroughly review the submissions on the proposals and make necessary adjustments before submitting its report for consideration.

“So we are not in a hurry. We want the best for the country. We are not making laws for ourselves. We are making laws for future generations”, he said.

Akpabio emphasised the need to modernise Nigeria’s tax system, aligning it with contemporary realities to foster growth, transparency, and efficiency.

Describing the reforms as a “transformative step forward,” he noted that taxation is not merely a government function but a shared responsibility that shapes national prosperity.

“A nation that fails to adapt its revenue system to the realities of our time risks stagnation and decline,” he stated.

According to Senator Akpabio, these reforms go beyond legislative formalities.

“They represent a collective effort to establish a tax framework that is robust, transparent, and business-friendly, ensuring that Nigeria’s economy thrives in an increasingly competitive global landscape”, he said.

 

National interest will guide process – Senate panel

Speaking earlier, the chairman of the Senate Committee on Finance, Sani Musa said the committee will be guided by national interest, fairness and inclusivity in handling the proposed tax reform.

He said the committee has acknowledged concerns about alleged marginalisation, disproportionate sharing, and possible biases in tax administration and revenue allocation. He assured that the process will be thorough, inclusive, and guided by national interest.

“Our goal is to develop a tax framework that promotes economic prosperity, encourages investment, and strengthens Nigeria’s fiscal sustainability.  A fair, transparent, and efficient tax system is fundamental to economic growth and national development.

“As we deliberate, let me emphasise that transparency, fairness, and inclusivity will be our guiding principles,” he said.