The Nigeria Extractive Industries Transparency Initiative (NEITI) supports the proposed 2024 Tax Reform Bill, currently under review in the National Assembly. This endorsement strengthens Nigeria’s efforts to improve its tax system and fiscal policies.
NEITI outlines its stance in a memorandum signed by its Executive Secretary, Dr. Ogbonnaya Orji. Addressed to the National Assembly leadership and the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, the document is also shared on X (formerly Twitter).
Dr. Orji highlights the bill’s potential to transform Nigeria’s tax system by streamlining administration and broadening the tax base to align with global best practices. He notes that NEITI’s evaluation follows a thorough review of the draft legislation, which incorporates extensive research and stakeholder consultations.
Key Features of the 2024 Tax Reform Bill
The bill seeks to address inefficiencies in Nigeria’s tax framework through:
- Expanding the Tax Base: Bringing previously untapped revenue sources, including the informal sector, into the system.
- Simplifying Tax Administration: Making compliance easier for individuals and businesses.
- Aligning with Global Standards: Implementing international best practices to attract foreign investment and boost economic growth.
- Enhancing Transparency: Strengthening accountability measures and reducing revenue leakages.
Stakeholder Responses and Policy Adjustments
In October 2024, the National Economic Council (NEC), chaired by Vice President Kashim Shettima and comprising the 36 state governors, recommends withdrawing the bill from the National Assembly to allow further consultations with stakeholders.
- Governors from the 19 Northern states, along with traditional rulers and regional leaders, strongly oppose provisions related to the derivation-based Value Added Tax (VAT) distribution model.
- In December 2024, President Bola Tinubu directs Attorney-General Lateef Fagbemi SAN to collaborate with the National Assembly to address concerns before the bill’s approval.
- In January 2025, the Nigeria Governors’ Forum (NGF) rejects any plans to increase VAT rates. After meeting with the Oyedele-led tax reform committee, NGF Chairman and Kwara State Governor AbdulRahman AbdulRazaq reaffirms the governors’ commitment to tax reform while warning against measures that could worsen economic challenges.
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