By Abiola Olawale
The House of Representatives has officially approved a series of tax reform bills presented by President Bola Ahmed Tinubu.
The legislation, which has been a subject of heated debate across political and economic circles, reportedly seeks to streamline tax administration, enhance revenue generation, and address what some call long-standing inequities in the current tax system.
The bills were passed following a marathon session where lawmakers debated clauses addressing corporate taxation, individual income tax brackets, and incentives for small and medium enterprises (SMEs).
During the plenary on Thursday, James Falake, chairman of the finance committee, moved a motion for the clause-by-clause consideration of the bill’s report.
The reports were subsequently considered, and the committee’s recommendations were approved.
A breakdown of the bill passed by the House of Representatives shows that on the VAT sharing formula, 50% is to be distributed equally, 20% is to be distributed based on population, and 30% is to be distributed based on consumption.
The current 7.5% VAT rate is retained. The House also amended the controversial inheritance tax clause, clarifying that any inheritance received before the dissolution cannot be subject to taxation.
It would be recalled that on October 3, 2024, President Bola Ahmed Tinubu wrote to the National Assembly over the tax reform bills.
The bills initially faced opposition from the northern governors, who argued that the proposed laws could harm the region’s interests, urging the national assembly to reject the bills and demanding fair and equitable implementation across all regions.
However, in January, the Nigeria Governors’ Forum (NGF) endorsed the bills after agreeing on an “equitable” VAT-sharing formula.
