How tax reform bill will drive economic growth

The Tax Reform Bill has become a point of discussion in Nigeria, generating enthusiasm and concern among various stakeholders, and the general public. This reform includes four legislative proposals: the Nigeria Tax Bill, which aims to eliminate multiple taxation; the Nigeria Tax Administration Bill (NTAB), designed to harmonize tax processes across all levels of government; the Nigeria Revenue Service (Establishment) Bill, which seeks to rename the Federal Inland Revenue Service to Nigeria Revenue Service; and the Joint Revenue Board Establishment Bill, proposing the creation of a Joint Revenue Board to streamline tax administration. Together, these bills are set to transform the nation’s tax sector, making it more efficient and aligned with global best practices.

President Tinubu stands firmly behind this reform, recognizing its potential to drive economic growth and enhance national development. In his recent statements, President Tinubu has expressed unwavering support for the Tax Reform Bill, urging northern governors to allow the legislative process to unfold without unnecessary interruptions. He emphasizes that this is not merely a political exercise; rather, it is a step toward achieving economic prosperity for all Nigerians. The bill is not about favoring one region over another but is designed to create a fairer and more effective tax system that benefits the entire country.

The Tax Reform Bill represents a move towards economic prosperity and national development. The focus should be on the transformative impact of these reforms, which aim to streamline tax administration and eliminate inefficiencies that have long hindered progress.

The vision that President Tinubu holds for Nigeria’s economy is one of resilience and opportunity. He envisions an economy where businesses can thrive, investments flow freely, and citizens enjoy improved living standards. The Bill is a component of this vision, aimed at simplifying tax burdens and enhancing compliance, allowing the government to invest more in public services and infrastructure.

For the citizens of Nigeria, the benefits of this reform are clear. By addressing the complexities of the current tax system, the bill promises to alleviate the burden on taxpayers, making it easier for people and businesses to meet their obligations. This, in turn, will lead to increased revenue for the government, enabling it to fund services that improve the quality of life for all Nigerians.

Nigerians should refrain from creating problems where none exist. President Tinubu acknowledges the valuable input from the NEC, as reflected in recent communications. It is important to understand that the bill is not designed to disadvantage the northern region. The derivation model for Value-Added Tax (VAT) is structured to allocate tax revenues based on consumption rather than the production location.

For instance, while telecommunications companies may be headquartered in Lagos, the substantial consumer base is in Kano, which means that the northern region stands to gain more from VAT revenue due to its high level of consumption. The same principle applies to other sectors, such as confectioneries and soft drinks. Therefore, irrespective of where, whether North, South, East, or West has much to gain from the proposed VAT distribution model.

As Nigeria moves forward with these reforms, it is necessary to remain focused on the bigger picture. There is a tremendous amount of work to be done, and the nation must avoid distractions that could derail its progress. President Tinubu is working closely together with the right team to ensure that the Tax Reform Bill catalyzes positive change and national development, paving the way for a prosperous future for all Nigerians.

With open dialogue and a commitment to collaboration, Nigeria can move forward toward a brighter, more equitable future. The time for change is now, and together, we can illuminate the path to progress and prosperity for all Nigerians. Supporting this reform will improve the economy generally and simplify tax procedures, allowing all citizens to prosper in a system built on efficiency and fairness.

Atoyebi, an award-winning investigative journalist, is the Technical Assistant, Broadcast Media, to the Executive Chairman of the Federal Inland Revenue Service. She writes from Abuja.