The Nigerian Senate has passed two of the four key tax reform bills introduced by President Bola Tinubu, marking a significant move toward modernizing the country’s taxation system.
Notably, the Senate rejected a proposed increase in Value-Added Tax (VAT) from the current 7.5% to 10%, choosing instead to maintain the prevailing rate while allowing VAT input claims on fixed assets, overhead, and administrative costs.
The approved legislation includes the Nigeria Revenue Service Establishment Bill, which effectively repeals and replaces the Federal Inland Revenue Service Act, and the Joint Revenue Board Establishment Bill, which seeks to harmonize tax administration nationwide.
The remaining two proposals — the Nigeria Tax Administration Bill and the Nigeria Tax Bill — are scheduled for deliberation and likely passage on Thursday.
This development followed a clause-by-clause review of the proposed laws by the Committee of the Whole, culminating in the third reading and final approval by the chamber.
The legislative package is a component of President Tinubu’s broader economic reform strategy aimed at overhauling the nation’s tax collection architecture and improving fiscal efficiency.
Senate President Godswill Akpabio commended the upper chamber’s legislative action, underscoring the transformative impact the reforms could have on Nigeria’s fiscal governance.
“These bills will add immense value to governance and transform how taxes are collected and shared in Nigeria,” Akpabio said.
He further reiterated the Senate’s readiness to expedite deliberation on the remaining bills, even if it requires extended sitting hours.
In addition to retaining the VAT rate, the Senate rejected proposals to discontinue funding for several key government agencies, including the Tertiary Education Trust Fund (TETFUND), the National Information Technology Development Agency (NITDA), and the National Agency for Science and Engineering Infrastructure (NASENI).
Instead, a 4% development levy was approved to sustain the funding of these institutions, to be allocated as follows:
- TETFUND – 50%
- Nigerian Education Loan Fund – 15%
- NITDA – 10%
- NASENI – 10%
- National Cybersecurity Fund – 5%
- Defence Security Fund – 10%
Akpabio emphasized that these agencies are essential to national development, warning that cutting off their funding could impede progress in education, innovation, and security.
During the plenary session, Deputy Senate President Barau Jibrin praised the legislative body for demonstrating maturity and unity in navigating contentious elements of the tax reform agenda.
He noted that the formation of an elders committee played a key role in mediating discussions among lawmakers, religious leaders, and regional stakeholders to achieve consensus.
“It is time to congratulate the entire Senate and, in particular, the committee on finance and the elders committee for the wisdom and leadership shown in these bills,” Jibrin remarked.
The House of Representatives has already passed the four tax reform bills, setting the stage for final harmonization and implementation.
These reforms are expected to establish a more transparent, equitable, and efficient taxation system, thereby supporting Nigeria’s long-term economic development goals.
