Connect with us

News

Tax Reforms: A Double-Edged Sword for Nigeria’s Economy

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

By Lukman Laleye Babalola.

 

When President Bola Ahmed Tinubu announced his ambitious tax reform agenda, it was clear that he intended to reshape Nigeria’s fiscal framework. The reforms, targeting personal income tax, corporate tax, and value-added tax (VAT) distribution, are undoubtedly bold and necessary. But like any sweeping policy change, they come with both promises and pitfalls.

As someone deeply invested in Nigeria’s socio-economic progress, I see these reforms as a double-edged sword—a tool for much-needed transformation, but one that requires careful handling to avoid cutting too deeply into the fabric of our fragile federal system.

Advertisement

Let us not downplay the potential benefits. The proposed exemption of individuals earning up to ₦800,000 annually from personal income tax is a welcome relief for low-income earners who have borne the brunt of rising inflation. Similarly, the reduction in corporate tax rates from 30% to 25% is a lifeline for businesses struggling to stay afloat in a challenging economic climate.

The overhaul of VAT revenue sharing, which allocates 60% of VAT revenue to the state where goods and services are consumed, aims to promote fairness and encourage states to boost their economic activity. For consumption-heavy states like Lagos and Rivers, this is a much-needed windfall that could translate into better infrastructure, healthcare, and education for their residents.

But these gains are not without costs. Nigeria’s regional disparities could deepen under this new tax regime. Northern states, with lower consumer activity and VAT contributions, stand to lose out, raising concerns about fairness in a nation already grappling with economic inequalities.

The implementation process is another hurdle. Overhauling a tax system is no small feat, and Nigeria’s tax collection mechanisms are notoriously inefficient. Without significant investment in infrastructure and human capacity, the reforms could collapse under their own weight.

Advertisement

Then there is the issue of political resistance. Many lawmakers and regional leaders, particularly from the north, have voiced concerns about the potential loss of revenue under the revised VAT formula. Balancing these competing interests will be a test of the administration’s political acumen.

Under the proposed tax reforms, states like Lagos, Rivers, and others in oil-producing regions stand to benefit significantly. With 60% of VAT revenue allocated to the state of consumption, high-consumption states like Lagos and Rivers are poised to see a substantial increase in their revenue. Lagos alone generates over half of Nigeria’s VAT, and retaining a greater share will empower the state to fund critical projects.

For oil-producing states, increased revenue can be invested in non-oil sectors such as agriculture, manufacturing, and tourism, helping them reduce dependency on crude oil and build more sustainable economies. The additional funds can be used to improve infrastructure, healthcare, education, and other public services, directly benefiting citizens in these states. The reforms also encourage states to create business-friendly environments to attract investments and increase consumption, further boosting revenue generation.

Members of the National Assembly are tasked with ensuring these reforms benefit all Nigerians equitably while addressing regional disparities. Legislators must address the fears of less economically vibrant states and push for transitional mechanisms, such as a redistribution fund, to support regions with lower VAT contributions. They must oversee how states utilize their increased revenues, ensuring the funds are invested in projects that directly benefit the public.

Advertisement

By engaging their constituents, lawmakers can explain the benefits of the reforms, address concerns, and secure public support, thereby easing tensions surrounding implementation. National Assembly members must also facilitate the passage of laws to strengthen tax administration, close loopholes, and ensure effective implementation of the reforms. Legislators from wealthier and poorer states alike must work together to ensure the reforms foster national unity and equitable development across all regions.

The National Orientation Agency (NOA) plays a critical role in ensuring public acceptance and understanding of the tax reforms. The agency must continue to simplify and disseminate information about the reforms to the grassroots, helping Nigerians understand how these changes will benefit them in the long run. By launching campaigns, the NOA can counter rumors and fears about the reforms, especially in regions where there is resistance due to concerns about inequitable benefits.

The NOA should encourage citizens to ask questions and provide feedback on the reforms. This engagement will foster trust and ensure the government remains accountable to its promises. The agency must also address regional concerns by showing how the reforms can be tailored to benefit less economically vibrant states through collaboration with local governments.

The Federal Inland Revenue Service (FIRS) is central to the success of the reforms, as efficient tax collection and administration are critical. The FIRS must invest in modern technology to improve tax collection processes, reduce leakages, and enhance compliance monitoring. Bringing the informal sector into formal taxation while ensuring compliance is not burdensome will also expand the tax net.

Advertisement

Training and equipping tax officers to handle the new tax structures efficiently will be crucial to prevent administrative bottlenecks. The FIRS must regularly publish reports on tax collection and utilization, fostering public confidence in the system. By collaborating with state governments, the FIRS can provide technical assistance to ensure states maximize their VAT collections under the new sharing formula.

As a nation, we cannot afford to shy away from difficult reforms. For too long, Nigeria’s tax system has been inefficient, inequitable, and unable to meet the needs of our growing population. These reforms, though imperfect, represent an opportunity to address these shortcomings and lay the groundwork for a more sustainable fiscal future. However, the government must tread carefully. Transparency, inclusiveness, and stakeholder engagement are non-negotiable. Addressing regional concerns and ensuring efficient implementation will be critical to the success of these reforms.

President Tinubu’s tax reforms have the potential to transform Nigeria’s economy, but they also carry significant risks. Agencies like the NOA and FIRS, along with the National Assembly, must work together to ensure the reforms deliver on their promise of a fairer, more prosperous Nigeria.

As we navigate this critical moment in our nation’s history, let us remember that true reform is never easy, but it is always worth pursuing when done with the greater good in mind.

Advertisement

 

*Lukman Laleye Babalola,is Publisher/Editor-In-Chief,Emporium Reporters online and Emporium Magazine.can be reached on babalolalukman@gmail.com, emporiumreporters@gmail.com.08037469328

Continue Reading
Advertisement
Click to comment

Warning: Undefined variable $user_ID in /home/naijuinz/public_html/wp-content/themes/zox-news/comments.php on line 49

You must be logged in to post a comment Login

Leave a Reply

News

Tinubu: Strong Institutions Are Bedrock of Democracy as Wike Delivers Body of Benchers Annex(Photos)

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

President Bola Ahmed Tinubu on Tuesday reaffirmed his administration’s commitment to strengthening Nigeria’s democratic institutions, declaring that the provision of modern infrastructure for the judiciary and legal profession is essential to deepening the rule of law and sustaining democracy.

Represented by the Secretary to the Government of the Federation, George Akume, at the commissioning of the Office Annex for the Body of Benchers in Abuja’s Institution and Research District, the President described the project as more than an architectural accomplishment, saying it symbolised the Federal Government’s resolve to build resilient institutions capable of advancing justice and national development.

“It is with profound honour and a great sense of national purpose that I stand before you today to officially commission this state-of-the-art Office Annex for the Body of Benchers,” Tinubu said.

“Today’s ceremony is not merely a celebration of a beautiful edifice crafted with architectural excellence. It is a resounding affirmation of our administration’s steadfast commitment to the rule of law, the independence of our institutions, and the dignity of the Nigerian legal profession.”

The President said his administration’s Renewed Hope Agenda recognises that democracy can only flourish where institutions are strong, independent and adequately equipped to discharge their constitutional responsibilities.

“When we took the oath of office, we promised Nigerians a Renewed Hope. We made it clear that democracy cannot thrive in a vacuum; it requires strong, resilient and well-equipped institutions to anchor it.”

He described the Body of Benchers, which oversees admission into the legal profession and enforces professional discipline, as one of the country’s most important legal institutions deserving of infrastructure that reflects its national significance.

“The Body of Benchers stands at the very apex of this institutional framework. It is only fitting that an institution of such monumental national significance is housed in an edifice that reflects its prestige, responsibility and dignity,” he said.

Tinubu stressed that providing infrastructure for the judiciary does not amount to executive interference but rather fulfils the constitutional responsibility of government to support institutions responsible for interpreting and safeguarding the law.

He disclosed that, beyond the newly commissioned annex, the Federal Capital Territory Administration had approved the construction of two 300-capacity hostels for the Nigerian Law School in Bwari to improve students’ welfare, completed the access road linking the Body of Benchers Secretariat to Nile University, and commenced work on a new fire service station to serve the district.

Advertisement

The President reserved special commendation for the Minister of the Federal Capital Territory, Barr. Nyesom Wike, saying the minister had fulfilled the mandate to transform Abuja into a modern and functional capital city.

“When I appointed Wike, I gave him a clear mandate to transform Abuja into a modern, functional and world-class capital city. Over the last three years, the scale of infrastructural development, urban renewal and project delivery in the FCT has been unmatched,” he said.

He listed the Court of Appeal Complex, Judges’ Quarters, the Outer Southern Expressway and several other landmark projects as evidence of what he described as Abuja’s ongoing renaissance.

“The timely completion and handover of this Body of Benchers Annex is yet another feather in that cap of accelerated governance. It shows that when leadership is focused, things get done, and they get done right.”

Advertisement

Tinubu urged the Chairman of the Body of Benchers, Olorogun Albert Akpomudje SAN, and members of the body to utilise the facility as a centre for justice, mentorship and legal reforms that respond to the evolving needs of Nigerians.

“My administration will continue to play its part, ensuring that our judicial officers are well-housed, well-remunerated and provided with the tools to dispense justice without fear or favour,” he added.

Earlier, the Minister of the Federal Capital Territory (FCT) Barr Nyesom Wike attributed the delivery of the project to President Tinubu’s support and prompt release of funds, saying the administration had consistently prioritised projects that strengthen institutions of justice.

The minister recalled that the proposal for the annex was initiated by former Chairman of the Body of Benchers, Chief Adegboyega Solomon Awomolo, SAN, who appealed for additional office accommodation after the annual budget had already been passed.

Advertisement

According to Wike, he approached President Tinubu, who directed that the project be included in the supplementary budget, with the approval subsequently secured from the National Assembly.

“Luckily, he prayed very well and Mr. President said, ‘Put it in the supplementary budget.’ That was approved by the National Assembly, and today we are here commissioning the project,” Wike said.

He also disclosed that another request by the Body of Benchers to ease traffic congestion around the institution had already been addressed through the construction of a new road scheduled for commissioning by the Vice President.

The minister said the FCT Administration would continue to support institutions within the justice sector, assuring the Body of Benchers of government’s readiness to consider further requests that would enhance its operations.

Advertisement

Speaking earlier, Chairman of the Body of Benchers, Olorogun Albert Akpomudje SAN, described the new annex as a significant intervention that would strengthen legal education, professional discipline and the administration of justice.

He stressed the need for continued collaboration between government and development partners to sustain investments that protect public infrastructure and improve access to justice.

Delivering the vote of thanks, the Minister of State for the FCT, Mariya Mahmoud, reaffirmed the administration’s commitment to strengthening institutions that uphold justice, discipline and the rule of law.

She described the annex as a landmark investment in Nigeria’s legal profession, saying it would serve as a centre for service, mentorship, ethical standards and professional excellence while advancing the work of the Body of Benchers in safeguarding the integrity of the nation’s justice system.

Advertisement
Continue Reading

News

PFIPC Signage Still At Federal Secretariat Despite Presidency’s Denial

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

The signage directing visitors to the office of the disputed Presidential Foreign Intervention Promotion Council (PFIPC) remains mounted at the Federal Secretariat in Abuja.

According to The Cable, a visit to the secretariat on Monday showed that the signage, which also refers to the Presidential Economic Advisory Council, was still on the floor occupied by the Federal Ministry of Health.

The Federal Secretariat houses ministries, departments and agencies and serves as a major administrative hub of the Federal Civil Service.

Despite the Presidency’s insistence that the PFIPC does not exist, the disputed council reportedly operated like a government agency.

Advertisement

It allegedly had an office at the Federal Secretariat, an allocation in the 2026 budget and approval to recruit staff.

In June, the Presidency distanced itself from the council, insisting that it was not created under President Bola Tinubu’s administration.

The Chief of Staff to the President, Femi Gbajabiamila, said his office did not appoint Adeniyi Adeyemi to head the organisation.

Adeyemi, however, challenged the disclaimer and called on the President to set up an independent panel to investigate the controversy.

Advertisement

Adeyemi questioned how the PFIPC allegedly appeared in the 2026 budget if the body did not exist.

A review of the 2026 Appropriation Act showed that the Presidential Economic Advisory Council/Presidential Foreign Intervention Promotion Council was listed under the Presidency with a total allocation of ₦1.302 billion.

It was also reported that the Federal Government granted the disputed PFIPC a waiver to recruit 300 staff in August 2025.

The Presidency later accused Adeyemi of forging an appointment letter and falsely presenting himself as a presidential appointee.

Advertisement

Police have filed an eight-count charge against Adeyemi and two others, who are said to be at large.

The Cable

Continue Reading

News

Russian Airstrike k!lls 23-yr-old female Nigerian Medical graduate in Ukraine days to graduation ceremony

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

A 23-year-old Nigerian medical graduate, Nnani Adaobi Marian, has d!ed after suffering severe injuries in a Russian airstrike on Kharkiv, Ukraine.

The Kharkiv National Medical University graduate was wounded on June 29, 2026 when Russian forces dropped aerial bombs on the Kholodnohirskyi district of Kharkiv.

She later d!ed in hospital after doctors battled to save her life, first in Kharkiv and later in Germany.

Kharkiv National Medical University confirmed her d3ath in a statement, describing her as a bright, sincere and kind-hearted person.

Advertisement

“Nnani Adaobi Marian was a bright, sincere and kind-hearted person. She easily found common ground with people and was distinguished by her thirst for knowledge, hard work and sincere desire to help others,” the university said.

The statement noted that due to the shelling she sustained severe injuries; treatment began in Kharkiv and later continued in Germany.

The university said that everyone sympathized, helped and hoped for her recovery, but they could not save her life.

According to the Kharkiv Regional Prosecutor’s Office, doctors fought for her life until the very end, expressing sincere condolences to the relatives and loved ones of the deceased.

Advertisement

Adaobi had studied at Kharkiv National Medical University since 2020.

She also completed internships at the University of Cambridge and Biruni University in Turkey.

At the time of the attack, Adaobi and her friend, Fatima Huseynova, were said to be on their way to a photoshoot ahead of their graduation.

Fatima d!ed at the scene, while Adaobi was rushed to hospital with serious injuries.

Advertisement
Continue Reading

Trending

Copyright © 2024 Naija Blitz News