News
Tax Reforms: A Double-Edged Sword for Nigeria’s Economy
- /home/naijuinz/public_html/wp-content/plugins/mvp-social-buttons/mvp-social-buttons.php on line 27
https://naijablitznews.com/wp-content/uploads/2024/12/IMG-20241215-WA0000.jpg&description=Tax Reforms: A Double-Edged Sword for Nigeria’s Economy', 'pinterestShare', 'width=750,height=350'); return false;" title="Pin This Post">
- Share
- Tweet /home/naijuinz/public_html/wp-content/plugins/mvp-social-buttons/mvp-social-buttons.php on line 72
https://naijablitznews.com/wp-content/uploads/2024/12/IMG-20241215-WA0000.jpg&description=Tax Reforms: A Double-Edged Sword for Nigeria’s Economy', 'pinterestShare', 'width=750,height=350'); return false;" title="Pin This Post">
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.
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.
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.
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.
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.
*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
News
Cholera Outbreak: Plateau Records 5 Deaths, 11 Confirmed Cases
Plateau State commissioner for Health, Dr Nicholas Baamlong, has revealed that the state recorded 11 confirmed cases of cholera, five deaths and 53 suspected cases.
Baamlong, who disclosed this to journalists yesterday in Jos, said the confirmed and suspected cases were reported in Pushit, Mangu 1 and Mangu 2 communities in Mangu local government area (LGA).
According to him, the state Ministry of Health is intensifying public health interventions to contain the outbreak, prevent further spread and reduce its impact on affected communities.
He explained that the state had taken decisive actions to control the outbreak and protect its citizens via the deployment of additional Response Teams (RRTs) to the affected wards, scaling up of treatment centres and isolation capacity and the emergency procurement of Rapid Diagnostic Tests Kits, intravenous fluids and essential drugs.
The Commissioner further said that the ministry had activated an Incident Management System (IMS), for a comprehensive and multi sectorial response to the outbreak.
“The activation of the IMS ensures a coordinated, efficient, and accountable response structure in line with national and international emergency response frameworks,” he said.
Baamlong explained that cholera was an acute diarrhoeal disease caused by consuming food or water contaminated with the bacterium Vibrio cholerae.
He urged residents of Mangu LGA and neighbouring communities to remain vigilant and take preventive measures, including drinking safe water, maintaining proper hand hygiene, avoiding open defecation, and ensuring proper waste disposal.
He also advised residents to promply report suspected cases of cholera to the nearest healthcare facility for immediate attention.
While reaffirming the state government’s commitment to safeguarding the health and well-being of residents, Baamlong called on development partners and other stakeholders to support ongoing response efforts.(NAN)
News
South Africa says 2,745 foreigners sent home in a week
South Africa has repatriated 2,745 foreigners in the week after President Cyril Ramaphosa vowed tougher action against illegal immigration, the country’s home affairs minister said on Sunday.
One of Africa’s largest economies, South Africa has long attracted migrant workers from across the continent, both legally and illegally.
But saddled with an unemployment rate above 30 percent, it has experienced recurring spurts of anti-immigrant unrest, including fresh violence in recent weeks.
Mobs of South Africans carrying sticks, whips and shields have marched through parts of the country ordering foreigners with no residency papers to leave by June 30.
Growing security fears after businesses were looted and foreigners targeted have prompted citizens of Nigeria, Malawi, Ghana, Zimbabwe and Mozambique to accept voluntary repatriation organised by their governments.
“As of last night, the number we can report is 2,745 repatriations that have come in this period since the president spoke,” Home Affairs Minister Leon Schreiber told reporters.
“It is a moving target,” he said.
The government said most of those repatriated were in the country illegally.
They include Malawian nationals, about 7,000 of whom have been sheltering in an open field in the eastern port city of Durban, according to an inter-ministerial migration committee set up after the president’s address.
Eight buses commissioned by the Malawian government began moving its citizens on Sunday, with South Africa providing 10 additional buses to speed up deportations, the committee said.
Some 560 people, including about 200 children, took the journey on Sunday, Malawi Consul General Max Biwi said.
Among those boarding the first buses, some carried babies on their backs and small bags of belongings.
“I’m relieved we are finally leaving. It’s better than living in fear here,” said Fortunate Chilenje from Blantyre, Malawi’s commercial capital.
The 25-year-old had lived in South Africa for three years, she told AFP, adding that threats to leave had followed her even at the camp, one of the largest to emerge since the unrest began.
The government said on Sunday it did not operate refugee camps and had no intention of establishing them, even on a temporary basis.
Another passenger, Laina Nala from Mangochi in southern Malawi, said she simply wanted to be dropped as close to her home as possible, rather than continuing on to Blantyre.
“Blantyre is too far and expensive from there,” she said.
For Hassan Hasha, 27, a debt linked to his journey to South Africa still hung over his head.
He said he had barely stayed in South Africa for weeks before the anti-foreigner sentiment flared, but added: “I have resigned myself to going home”.
Last week, Ramaphosa acknowledged public concerns over illegal immigration but warned that the authorities would not tolerate anyone taking the law into their own hands.
Tensions escalated after two Mozambicans were killed following a May 29 march against illegal migrants in the Western Cape town of Mossel Bay. Mozambican authorities put the toll at five.
There are more than three million foreigners living in South Africa, or 5.1 percent of the population, according to the statistics agency.
News
FCT residents decry rising cost of tomatoes
Many residents of the Federal Capital Territory (FCT) have expressed concern over the continued increase in the price of tomatoes.
The residents told the News Agency of Nigeria (NAN) on Sunday in Abuja that the situation was making things difficult for both traders and residents.
A market survey conducted by NAN in some markets in the FCT showed a sharp rise in tomato prices in recent weeks.
A vegetable seller at the Suleija market, Malam Isah Ado, said they were facing challenges in their business due to the surge in tomato prices.
Ado said a big basket of tomatoes, which sold for between N85,000 and N90,000 a few weeks ago, currently sells for between N150,000 and N170,000.
He attributed the rise in price to seasonal scarcity, post-harvest loses and high cost of transportation from farms to markets.
A tomato seller at Garki New Market, Ms Philomena Bassey, lamented that the cost of transporting produce from the producing states to the markets had continued to increase.
“Customers think we are ripping them off and making a lot of profit from our sales, but that is not the case.
” We buy these tomatoes sometimes cheaply from the farms where they are produced, but by the time they get to Abuja, the price will have gone up.
“So, we have to factor in all of these factors, which makes the cost of the product increase,” she said.
A small-scale trader popularly known as Mummy Juli, who resides in Kubwa village, said tomatoes were very scarce in the market these days.
” The scarcity has made tomatoes very expensive to buy, thus forcing us to also adjust our prices.
“I used to share a basket of tomatoes with three other traders, but now I have to share with five colleagues because of the increased price in the market,” she said.
She told NAN that a small bucket of tomatoes she usually sells for between N4,000 and N4,500 now sells for between N8,000 and N10,000.
“Due to the hike in price, I can no longer sell a portion of tomatoes for less than N1,000 as against N100.
” This has led to reduced sales in my business because the majority of my customers are very low-income earners who buy in small quantities.
“As the situation is right now, there is nothing I can do; I have to keep managing and hope for the best,” she said.
Mrs Angella Ikenna, a mother of two, shopping at the Dutse Market, said the rising cost of tomatoes was taking a toll on her family’s feeding expenses.
“I used to buy the tomatoes I need for a week, but due to their price, I now buy only what I need for a day or two,” she said.
Similarly, Mr Moses Sunday, a nurse, lamented that the rising cost of tomatoes was compounding the country’s economic situation.
Mrs Badia Muhammad, a resident of Dei-Dei, said the rise in tomato prices was affecting many households.
“We use tomatoes almost in every meal, but due to the sharp rise, we can no longer afford to buy them as we used to and have to opt for cheaper alternatives.
“We appeal to the government to address the issues affecting the supply of tomatoes and implement measures that will enhance production.
-
News16 hours ago31.5kg cocaine trafficking: 11 Indian sailors, ship convicted, fined $6m
-
Crime15 hours agoNDLEA nabs businessman with 6.10kg cocaine starched in shirts, towels from Brazil+Photos
-
Foreign16 hours agoHormuz to reopen on Sunday after US-Iran sign deal-Trump
-
Sports16 hours agoPSG’s Barcola hands over transfer request as Aresenal, Liverpool show interest
-
Politics15 hours agoNew Delta Vision not a political project, but generational movement, Delta State’s ADC candidate Unuafe clarifies
-
News14 hours agoECOWAS Parliament Convenes High-Level Dakar Summit to Drive Renewable Energy Push in Rural West Africa
-
News14 hours agoDeputy Speaker Pushes for Home-Grown Defence Industry, Stronger Financial Crackdown on Insecurity
-
Sports10 hours agoReal Madrid complete a Shocking Signing of Chelsea Superstar

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