The Nigerian House of Representatives has passed four key tax reform bills aimed at overhauling the country’s tax system. The bills, proposed by President Bola Tinubu, include the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill.
A major highlight of the legislative session was the decision to retain the Value Added Tax (VAT) rate at 7.5%, rejecting an earlier proposal to gradually increase it to 15% by 2030. Lawmakers also approved a revised VAT distribution formula: 50% shared equally among all states, 20% based on population, and 30% according to actual consumption.
The reforms also introduce tax exemptions for military personnel and redefine inheritance tax provisions. Additionally, the bills establish the Nigeria Revenue Service and the Joint Revenue Board to improve tax administration.
These measures aim to boost Nigeria’s tax-to-GDP ratio, which currently stands at 10.8%, among the lowest globally. The bills will now proceed to the Senate for consideration before being sent to President Tinubu for assent.
