Senate Passes Two Tax Reform Bills, Rejects VAT Increase

The Nigerian Senate has passed two of the four tax reform bills proposed by President Bola Tinubu, marking a significant step towards overhauling the country’s tax system.

The two bills that were approved are the Nigeria Revenue Service Establishment Bill and the Joint Revenue Board Establishment Bill.

The bills were passed on after the Senate reviewed the report of an ad hoc committee chaired by Senator Sani Musa, which was set up to address controversies surrounding the proposed reforms. The Senate President, Godswill Akpabio, announced the passage of the bills after a majority of senators supported them through a voice vote.

Akpabio expressed optimism that the reform bills would enhance governance and revolutionize tax collection and distribution across the country.

“These bills will add immense value to governance and transform how taxes are collected and shared in Nigeria,” he said.

The Senate also rejected a proposal to increase the Value-Added Tax (VAT) from 7.5% to 10%, opting to retain the current rate.

The two remaining bills, the Nigeria Tax Administration Bill and the Nigeria Tax Bill, are scheduled for consideration and passage on Thursday.

The four tax reform bills were transmitted to the National Assembly in October 2024 and have already been passed by the House of Representatives.

The Senate has committed to finalizing the outstanding bills, with Akpabio assuring that they will work extended hours if necessary to complete the process.

The passage of these bills is a significant development in the government’s efforts to reform the tax system and improve revenue collection.

The Senate’s decision to reject the VAT increase is also expected to provide relief to businesses and individuals who would have been affected by the proposed hike.