…say Reps has not take any definitive position on tax reform bills
….as presidency say bills not designed against any region
By Gloria Ikibah
The Speaker of the House of Representatives, Rep. Abbas Tajudeen, has expressed concerns over Nigeria’s tax-to-GDP ratio, which currently stands at a mere 6 per cent.
The Speaker noted that this figure was significantly below the global average and the World Bank’s recommended minimum benchmark of 15 per cent necessary for sustainable development, despite Nigeria being Africa’s largest economy.
Abbas stated this at an interactive session on Tax Reform Bills at the National Assembly Complex on Monday in Abuja.
He stated, “Nigeria, despite being Africa’s largest economy, struggles with a tax-to-GDP ratio of just 6 per cent, far below the global average and the World Bank’s minimum benchmark of 15 per cent for sustainable development. This is a challenge we must address if we are to reduce our reliance on debt financing, ensure fiscal stability, and secure our future as a nation.”
The Speaker highlighted the importance of the proposed tax reforms in diversifying Nigeria’s revenue base, ensuring equity, and fostering an environment conducive to investment and innovation.
“The proposed tax reform bills aim to diversify our revenue base, promote equity, and foster an enabling environment for investment and innovation. However, as representatives of the people, we must approach these reforms thoughtfully, understanding their potential implications for every segment of society.
Taxes should be fair, transparent, and justifiable, balancing the need for public revenue with the burdens they impose on individuals and businesses”, Abbas added.
Acknowledging public concerns and debates surrounding the bills, Speaker Abbas emphasized the need for thorough deliberation and clarification of contentious issues.
“The controversies surrounding these bills, whether in the media, civil society, or among governance stakeholders, are a reflection of their importance.
Such debates are healthy and necessary in a democracy, and this session aims to channel those discussions into productive outcomes. It is critical that we listen to diverse perspectives, ask probing questions, and seek clarity on any unclear provisions,” he stated.
He reassured Nigerians that the House has not yet adopted a position on the bills and is committed to ensuring that the final legislation serves the best interests of the nation. “The House has not yet taken a definitive position on these bills. Our role is to scrutinise them thoroughly, ensuring they align with the best interests of our constituents and the nation at large. We owe this duty to Nigerians,” he said.
The Speaker also stressed the importance of balancing national interests with the needs of citizens, reiterating that “Taxes should be fair, transparent, and justifiable, balancing the need for public revenue with the burdens they impose on individuals and businesses.”
Rep. Abbas underscored the significance of pre-legislative scrutiny as a vital parliamentary practice to resolve ambiguities and ensure alignment with constitutional provisions, and described the interactive session as an opportunity for lawmakers to engage with experts and stakeholders to better understand the potential implications of the proposed reforms.
Addressing the session, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, clarified that the proposed tax reform bills were not designed to undermine or marginalize any region.
Iyedele emphasized that the reforms aim to enhance efficiency and boost revenue allocation to states based on consumption patterns.
He explained, “Currently, under Section 40 of the VAT Act, VAT revenue is allocated 15 per cent to the Federal Government, 50 per cent to the States and FCT, and 35 per cent to Local Governments. There is no negative thinking about any region or anything.”
Oyedele outlined key aspects of the reforms, which include amendments to income tax laws to support remote work opportunities, particularly in the global business process outsourcing sector.
Other provisions include tax exemptions for small businesses with an annual turnover of N50 million or less, alongside initiatives aimed at boosting exports and promoting the digital economy to create more opportunities for Nigerian youths.