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 [email protected], [email protected]

By Sonny Aragba-Akpore

In the midst of mounting agitations for and against, the proposed Tax Reform Bills, the Federal Government of Nigeria recently made a bounteous harvest in taxes of about N2.5 trillion when global Information and Communications Technology (ICT) firms operating in the country complied with the Code of Practice for Interactive Computer Services/ internet intermediaries.

Kashifu Inuwa Abdullahi, the Director General of the National Information Technology Development Agency (NITDA) must be basking in the euphoria of this breakthrough as the guidelines he introduced a little over two years ago in controversial circumstances yield results which are incontrovertible.

Google, Microsoft, Tik Tok and others obeyed the Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries and Inuwa whose collaboration with other government agencies including the Nigerian Communications Commission (NCC) and others, savors the glory.

These figures cover the first half of 2024 according to a statement by Hadiza Umar ,NITDA,s Director, Corporate Affairs and External Relations.

“The code establishes a robust framework for collaborative efforts to protect Nigerians against online harms, such as hate speech, cyber-bullying, as well as disinformation and/or misinformation.

Similarly, to ensure compliance with the Code of Practice, NITDA also wishes to notify all Interactive Computer Service Platforms/Internet Intermediaries operating in Nigeria that the Federal Government of Nigeria has set out conditions for operating in the country.

These conditions address issues around legal registration of operations, taxation, and managing prohibited publication in line with Nigerian laws.

The conditions include the need to:
*Establish a legal entity i.e., register with Corporate Affairs Commission (CAC);

*Appoint a designated country representative to interface with Nigerian authorities;

*Abide by all regulatory demands after establishing a legal presence;

*Comply with all applicable tax obligations on its operations under Nigerian law;

*Provide a comprehensive compliance mechanism to avoid publication of prohibited contents and unethical behaviour on their platform; and

*Provide information to authorities on harmful accounts, suspected botnets, troll groups, and other coordinated disinformation networks and deleting any information that violates Nigerian law within an agreed time frame.”

In line with best practices and In accordance with its mandates, President Muhammadu Buhari, directed NITDA to develop a Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries (Online Platforms), in collaboration with relevant Regulatory Agencies and Stakeholders.

Accordingly , NITDA presented to the Public a Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries for further review and input.

This was on June 13,2022.

The Code of Practice is aimed at protecting fundamental human rights of Nigerians and non-Nigerians living in the country as well as define guidelines for interacting on the digital ecosystem.

“This is in line with international best practices as obtainable in democratic nations such as the United State of America, United Kingdom, European Union, and United Nations.”

The Code of Practice was developed in collaboration with the Nigerian Communications Commission (NCC) and National Broadcasting Commission (NBC), as well as input from Interactive Computer Service Platforms such as Twitter, Facebook, WhatsApp, Instagram, Google, and Tik Tok amongst others. O

ther relevant stakeholders with peculiar knowledge in this area were consulted such as Civil Society Organizations and expert groups. The results of this consultations were duly incorporated into the Draft Code of Practice now a code in line with “the new global reality stating that the activities conducted on these Online Platforms wield enormous influence over our society, social interaction, and economic choices.

Hence, the Code of Practice is an intervention to recalibrate the relationship of Online Platforms with Nigerians in order to maximise mutual benefits for our nation, while promoting a sustainable digital economy.”

Hadiza Umar, quoting data from the Federal Inland Revenue Service (FIRS) and the National Bureau of Statistics (NBS) explained that these figures were clearly a windfall for the government.

This Code was issued jointly by the Nigerian Communications Commission (NCC), National Broadcasting Commission (NBC), and NITDA and it outlines clear guidelines for promoting online safety and managing harmful content including but not limited to the protection of children from harmful online content.

“Data from the Federal Inland Revenue Service (FIRS) and the National Bureau of Statistics (NBS) reveal that foreign digital companies, including interactive computer service platforms and internet intermediaries (such as social media platforms) operating in Nigeria, contributed over N2.55 trillion (approximately $1.5 billion) in taxes in H1 2024.

“This significant increase in revenue underscores the role of robust regulatory frameworks in shaping compliance and driving revenue growth in the digital economy,” NITDA stated.

Updates on the level of compliance with the Code of Practice for Interactive Computer Service Platforms/Internet Intermediaries, show that all the digital platforms made conscious efforts to address user safety concerns in line with the Code and the platforms’ community guidelines.

Overall statistics across all the platforms show that:
“They received 4,125,283 (Four million, one hundred and twenty-five thousand, two hundred and eighty-three) registered complaints in 2023.

Content takedown: 65.8 million Content removed and re-uploaded after appeal by users: 379,433 Closed and deactivated accounts: 12.09 million” NITDA is excited and pleads “ for continued collaboration and innovation to address emerging challenges and ensure a safer and more responsible digital space.”

NITDA in June 2022 announced the Code, which seeks to moderate activities on social media blogs and online publications.

Specifically, the Code states that internet platforms including social media should as a rule
“act expeditiously upon receiving a notice from a user, or an authorised government agency of the presence of unlawful content on its Platform.”

“Act quickly to remove, disable, or block access to non-consensual content that exposes a person’s private areas, full or partial nudity, sexual act, deepfake, or revenge porn, where such content is targeted to harass, disrepute, or intimidate an individual.

Disclose the identity of the creator of information on its Platform when directed to do so by a Court order.”
“Provided that an order of this nature shall apply for the purpose of preventing, detecting, investigating, or prosecuting an offence concerning the sovereignty and integrity of Nigeria, public order, security, diplomatic relationships, felony, incitement of an offence relating to any of the above or in relation to rape, child abuse, or sexually explicit material.”

NITDA commends the efforts of the platforms, for the goal of creating a safer digital ecosystem which requires continuous collaboration and engagement with all stakeholders to strengthen and enhance user safety measures, digital literacy, trust and transparency.

Section 1 paragraphs b to e of the NITDA Act, 2007 are particularly instructive because they empower it to:
“(b) Provide guidelines to facilitate the establishment and maintenance of appropriate for information technology and systems application and development in Nigeria for public and private sectors, urban-rural development, the economy and the government;

(c) Develop guidelines for electronic governance and monitor the use of electronic data interchange and other forms of electronic communication transactions as an alternative to paper-based methods in government, commerce, education, the private and public sectors, labour, and other fields, where the use of electronic communication may improve the exchange of data and information;

(d) Develop guidelines for the networking of public and private sector establishment;

(e) Develop guidelines for the standardization and certification of Information Technology Escrow Source Code and Object Code Domiciliation, Application and Delivery Systems in Nigeria;”

By Richard M. Mills

Every December, we mark three international observances that are at the heart of the U.S.-Nigeria partnership: World AIDS Day, International Anti-Corruption Day, and Human Rights Day. While distinct, these commemorations underscore a simple truth – Nigeria’s path forward requires progress on health, good governance, and human rights. The United States remains your steadfast partner on this journey.

For two decades, the United States has stood with Nigeria in the fight against HIV/AIDS under the President’s Emergency Plan for AIDS Relief (PEPFAR). The U.S. government has invested more than $8.3 billion in Nigeria’s health sector and provided life-saving anti-retroviral treatment to more than 1.5 million people. These numbers represent improved life expectancy and quality of life for these Nigerians and their families. In clinics across Nigeria, I’ve met dedicated healthcare workers who deliver HIV prevention, treatment, and care, supported by the resources of the American people. This work has done more than save lives – using HIV as an entry point, Nigeria’s health system has also benefited. As Nigeria’s health system is strengthened, this important work will be led by government and engagement with the private sector to sustain the gains. This commitment was reinforced during Ambassador Nkengasong’s recent visit, where his discussions with Nigerian health officials focused on how the Government of Nigeria would sustain the HIV health programs with strengthened Nigerian leadership and local ownership.

But positive health outcomes depend critically on good governance. When medical supplies are diverted, when healthcare workers go unpaid, when facilities buy dangerous, counterfeit medications or lack resources due to mismanaged funds, it costs lives. This is why the United States supports numerous initiatives, not only in the health sector, to enhance transparency and accountability in Nigeria. Our programs work directly with government agencies and civil society organizations to strengthen fiscal responsibility with the goal of the state ensuring resources reach their intended beneficiaries.

The success of these efforts rests on respect for human rights and civic engagement. When members of marginalized communities face discrimination in accessing healthcare, when citizens fear reporting blatant corruption like the need to pay for appointments or ‘free’ healthcare, or when vulnerable populations cannot advocate for their needs, development falters. Through our partnership with Nigeria, we promote the rights of every person to access essential services and enjoy fundamental freedoms without fear or discrimination.

These three areas – health, transparency, and human rights – reinforce each other. Consider the results: U.S.-supported initiatives have helped strengthen pharmaceutical supply chains, reducing theft and ensuring safe medicines reach patients. Our human rights programming has empowered civil society organizations to advocate for marginalized communities, leading to better access to health services. Our health system investments have created platforms for transparency that benefit all sectors. And, perhaps most importantly, according to a recent survey by the United Nations Office on Drugs and Crime, Nigerians are both more frequently refusing to pay bribes and reporting bribe seekers to investigative journalists and rule of law authorities. A shift in norms is beginning to take root and must continue.

The U.S. Embassy stands ready to support Nigerian voices pressing the fight against corruption in Nigeria. To Nigeria’s government officials, civil society leaders, healthcare workers, and citizens: your dedication to building a stronger nation inspires us. Together, we can continue to advance the interconnected goals of better health outcomes, good governance, and human rights for all Nigerians. Challenges remain, but the work we’ve done together shows what could be possible on a larger scale across these crucial domains.

As we mark these December observances, let us use this moment not just for reflection, but for renewed commitment and action. The United States continues to stand with the Nigerian people as they carry out this essential work with their elected government.

*Ambassador Richard M. Mills is the , United .States Ambassador to Nigeria