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Tax Reform Bills Propose New Sharing Formula, Cede 55% to State Govt
The Senate on Thursday resumed its debate on the Tax Reform Bills, a set of four legislative proposals to increase value-added tax (VAT) distributable to the subnational governments to 55% while reducing the federal government’s share to 10%.
The new legislative regimes also proposed zero VAT on exports and essential consumptions by the masses and grant of input VAT credit on assets and services in addition to goods consumed by businesses to lower the cost of production
These far-reaching initiatives were contained in the lead debate of Leader of the Senate, Senator Opeyemi Bamidele on the Tax Reform Bills at the Senate Chamber, National Assembly Complex, Abuja yesterday.
The Federal Executive Council had proposed the Tax Reform Bills comprising the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024 and Nigeria Tax Bill, 2024.
The bills elicited spirited interests among key lawmakers and stakeholders across party lines, a situation that informed the leadership of the Senate to invite Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele and Chairman, Federal Inland Revenue Service, Dr. Zacch Adedeji to brief its plenary.
Leading debate at the plenary, Bamidele reeled out far-reaching proposals contained in the Tax Reform Bills, which according to him, aims at simplifying the tax landscape, reducing the burden on small business and streamlining how taxes are collected.
In the area of tax exemptions, Bamidele pointed out that those, whose salaries are not more than the minimum wage from Pay As You Earn (PAYE) deductions, would be exempted from the tax regime.
He also said small businesses with annual turnover of N50 million or less “are equally exempted from payment of taxes,” a key pro-business initiative that encourages job creation; deepens ease of doing business and incentivises more investments.
Similarly, the senate leader explained that there was a proposed huge reduction in company income tax from the current 30% to 25% that would last for at least two years.
He said: “As part of deliberate attempt to curtail the incidence of double taxation and multiplicity of taxes and levies, multiple taxes hitherto paid by companies under various tax heads namely 2.5% education tax, 0.25% NASENI tax have been harmonized into a development level of 2% which by 2030 will be applied to fund the newly established student loan scheme which will benefit many Nigerian youths.
“Unlike what is obtainable under the existing tax regime whereby the Federal Government takes a lion share of VAT revenues, it is proposed that the sharing formula should allow the State Government share 55% of VAT revenue from the current 15% to 10% sharing formula.
“However, Local Governments share of VAT revenue remains unaffected. Relatedly, basic items consumed by Nigerian households such as food items, medical services and pharmaceuticals, educational fees, electricity etc. are exempted from VAT.
“Again, as part of efforts to ease the administration of income taxes and levies across the Federation, there is a reasonable effort made to consolidate core tax statutes and related tax legislations,” Bamidele explained.
Contrary to misrepresentations in the public domain regarding the intendment of the Bills under consideration, Bamidele explained that the bills contained innovative and people-oriented proposals as part of the government’s deliberate fiscal and tax reform measures to cushion the effect of ongoing broader economic policies such as the removal of subsidy on petroleum products, renewed efforts to implement cost -reflective electricity tariffs in the power sector etc on Nigerian citizens.
In his contribution, former Chief Whip of the Senate, Senator Ali Ndume (Borno South) claimed that his problem was about timing and the issue of derivation.
He added that the Constitution of the Federal Republic of Nigeria, 1999 (as amended) must be amended before the Tax Reform Bills should take effect, therefore calling for its immediate withdrawal.
Ndume observed: “I am not against the reform, my problem is timing and the issue of derivation make the reform contagious. The 1999 Constitution has to be amended before the bills can be effective.”
However, the Chief Whip of the Senate, Senator Mohammed Munguno (Borno North) expressed strong objection to Ndume’s submissions, asking the Senate to disregard it and pass the bills for second reading.
Munguno urged the Senate to pass the bill into second reading, advocating that all areas of concern would be addressed at the public hearing stage.
After the debate that featured Chairman, Senate Committee on Finance, Senator Sani Musa and Chairman, Senate Committee on Ecology, Senator Seriake Dickson, the Senate unanimously passed the bills into second reading following Munguno’s final position.
In his remarks, the President of the Senate, Senator Godswill Akpabio referred the bill to the Senate Committee on Finance, advising the Committee to invite all the stakeholders to the public hearing to address all areas of concern.
The Speaker, House of Representatives, Rep. Abbas Tajudeen, has emphasized that affirmative action for women is not a privilege or an undemocratic measure but a necessary corrective step to promote fairness and achieve gender balance in Nigeria’s political landscape.
In his keynote address at a session with Speakers of State Houses of Assembly, held to mark the conclusion of the 16 Days of Activism Against Gender-Based Violence (GBV), Speaker Abbas called for the integration of women’s and gender issues into the constitution, policies, statutes, and budgetary processes of the country. The session took place at the National Assembly on Monday.
Reflecting on the significance of the campaign, Speaker Abbas noted, “This action signified our resolve to combat violence against Nigerian women and to reinforce our collective commitment to creating a safer and more equitable society.”
He recalled leading an advocacy walk from the National Assembly to the Force Headquarters, where a petition was submitted to the Inspector General of Police; this, he said, demonstrated the resolve of lawmakers to address GBV comprehensively.
The Speaker commended the 16 Days of Activism campaign, which began on November 25, for uniting various stakeholders in the fight against GBV and the push for women’s empowerment across the nation. He highlighted the National Assembly’s leadership role in legislative reforms aimed at protecting women and promoting gender equity. These efforts include the enactment of key laws such as the Violence Against Persons (Prohibition) Act, the Child’s Rights Act, and the Trafficking in Persons (Prohibition) Enforcement and Administration Act.
Speaker Abbas stressed that the 10th House of Representatives has intensified these efforts through its Legislative Agenda, prioritizing constitutional amendments that will enhance women’s participation and representation in governance. He underscored the critical role women play, stating, “Women are the cornerstone of our families and communities, yet their political representation remains unacceptably low. This imbalance must change—not for improved statistics but for the transformative value women bring to governance, leadership, and policymaking.”
He further elaborated on the barriers hindering women’s full participation in political and public life, citing cultural norms, economic disparities, and insufficient legal protections as systemic obstacles. According to him, “A society that protects its women and leverages their potential is one that secures its future.”
To address these issues, the 10th Assembly has initiated constitutional amendment processes early, allowing time for thorough consultation and consensus-building. The House Committee on Constitution Amendment has been engaging stakeholders through sensitization and advocacy to garner support for provisions that institutionalize greater women’s representation.
“These efforts go beyond tokenism,” Speaker Abbas asserted. “Affirmative action for women is not undemocratic; it is a necessary corrective measure to address historical inequities and unlock our nation’s full potential. Many African countries, such as Rwanda and South Africa, have successfully enshrined affirmative action in their constitutions.”
The Speaker also acknowledged the critical role of state Houses of Assembly in advancing these reforms, urging state speakers to actively participate in ensuring that gender-focused constitutional amendments and legislation are adopted at the sub-national level.
The Chief of Army staff Lt Gen Olufemi Oluyede has said that he was in Maiduguri last week to ginger his officers and men to change the narrative of the war by thinking outside the box to get positive results.
General Oluyede said that for too long the Army has been thinking after the same old pattern of fighting asymmetric warfare adding that it was time to think differently so that the enemy would be flushed out completely.
He said he was not unaware of the strengths and weaknesses of his troops which is why the entire management team in the Army Headquarters will make sure that more sophistication is added to their existing platforms to enable them increase their strengths and overcome the enemy in all fronts once and for all.
In a jam packed interview after he had toured critical areas of the theatre, the Army chief went on: ” I’m here to speak to my officers and soldiers and to appraise their operational readiness and that I have done.
What is going to be new here is that we need to reappraise our operations so that we can get a different result. “We don’t want to continue with operations, whereby we’ll be doing what we’ve been doing before and getting the same results.
Now, we want different results. So we’ve sat down. We have strategized. We’re going to bring in more importance into our challenges, bringing more platforms to support the soldiers, so that they can do their work well.
“I think we have achieved that aim. So we’re going back to Abuja to see how we can add more to their platforms support them in the operations, and I’m sure we’ll get better returns.” Said the Army chief.
Responding to questions on challenges affecting the Commanders and men on the ground, the Army chief went on: “I’m very aware of these challenges, but I want to take one moment to make you realize the fact that there will always be challenges.
“Now, the most important thing is how we react to those challenges. If you recall, I was in Sokoto when the issue of the lakurawa people came up. I was prompted to go to Sokoto then and the essence of me going was to see what we could do to make things better.
“And for the past two months, you must have seen that, something is being done there. I’m talking about Zamfara, and you know, North West in general, we are also going to be backing up the operations with technology, to see how we can make things better.”(www.krestnews.com).
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