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BREAKING: Vice President and Governors to meet with Tax Committee on New Legislation
The National Economic Council (NEC) has decided to engage with the Presidential Fiscal Policy and Tax Reforms Committee to discuss concerns regarding the newly implemented tax legislation.
This announcement was made by Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications (Office of the Vice President), following the NEC’s inaugural virtual meeting of the year on Thursday.
This move comes in response to increasing discussions sparked by insights from KPMG, which highlighted possible discrepancies and uncertainties within the new tax framework.
Insights from the NEC Meeting
The statement revealed that Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, provided an update to the Council on the objectives, scope, and status of the tax reforms.
Oyedele noted that the reforms aim to rectify deep-rooted inequities in Nigeria’s tax system and to foster shared prosperity by addressing what he termed a fragmented and burdensome framework for individuals and businesses.
The committee also shared a summary of the new tax structure, detailing its priorities, goals, potential challenges in implementation, and the opportunities it offers for comprehensive economic transformation.
To facilitate effective implementation, the committee emphasized the necessity of state governments’ support, given that their governors are integral members of the NEC, highlighting that cooperation at the sub-national level is vital for the reforms’ success.
Highlights from Oyedele’s Presentation
Among the recommendations put forward, the committee urged states to adopt a Tax Harmonisation Law to synchronize local tax practices with the new national guidelines.
Additionally, they suggested introducing a presumptive tax system for the informal sector, aimed at broadening the tax base while easing compliance for small and informal enterprises.
The committee also called for the establishment of a National Fiscal Policy and encouraged enhanced funding for State Internal Revenue Services to improve tax administration capabilities nationwide.
In response, the Council instructed the committee to prepare a more detailed brief for presentation at the upcoming NEC conference in February, aimed at equipping sub-national governments for a coordinated implementation of the new tax laws across the country.
Significance of the Engagement
The NEC’s initiative illustrates growing apprehensions among investors, tax professionals, and other key stakeholders regarding the interpretation and application of Nigeria’s new tax laws.
Clear and consistent interpretations will be crucial in shaping compliance behaviors, attracting capital, and maintaining economic confidence during a time when Nigeria is focused on boosting investment and growth.
This planned collaboration underscores the government’s acknowledgment of the importance of state-level engagement, recognizing the critical role that local governments play in tax administration and enforcement.
Additional Context
KPMG previously released a report identifying various gaps and risks within the new tax laws, including issues related to share disposal taxation, implementation timelines, indirect share transfers, VAT on insurance premiums, dividend taxation, and requirements for non-resident registrations.
The firm cautioned that certain provisions could introduce investor uncertainty, diminish competitiveness, or complicate administrative processes if not clarified.
In defense, Oyedele’s committee contended that many of KPMG’s concerns arose from analytical missteps, misunderstandings of the reform context, disagreements with intentional policy choices, or clerical issues already identified internally.
The upcoming NEC conference in February is anticipated to serve as a pivotal forum for addressing outstanding concerns and aligning federal and state governments on the practical implementation of the new tax framework.
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