Senate Holds Public Hearing On Tax Reforms

Less Than 30% of Nigerians Pay Taxes But Want Good Roads – Akpabio

The Nigerian Senate has commenced public hearings on four contentious tax reform bills, with Senate President Godswill Akpabio stressing the need for a stronger tax culture in the country.

Speaking at the hearing on Monday, Akpabio pointed out that while many Nigerians demand improved infrastructure and social amenities, less than 30% of the population actually pay taxes.

He insisted that the proposed laws would enforce tax compliance to generate the necessary funds for national development.

The hearing saw widespread support from key stakeholders, including the Nigeria National Petroleum Company Limited (NNPCL) and the Revenue Mobilization and Fiscal Responsibility Commission (RMFAC).

RMFAC representatives stated that the reforms would enhance economic stability, increase infrastructure funding, and boost government revenue at both federal and subnational levels.

They also revealed that agreements had been reached with state governors on VAT distribution and urged the Senate to consider a new revenue-sharing formula proposed by the Governors’ Forum.

NNPCL, represented by its Group Managing Director, Mele Kyari, expressed approval for the reforms, emphasizing that consolidating tax laws would bring transparency, efficiency, and predictability to the tax system.

The oil and gas sector, he added, welcomes the clarity the reforms would provide regarding royalties and tax obligations.

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However, opposition came from the Association of Licensed Telecommunications Operators of Nigeria (ALTON), which objected to a proposed excise duty on telecom services.

ALTON argued that such duties are typically applied to luxury goods like alcohol and tobacco, and warned that a 5% levy was excessive.

The group suggested the reduction of tax rate to 2% if implemented

A northern policy think tank stated that, while concerns had initially been raised, the region now sees potential benefits in the tax reforms.

The group represented by Mohamed Yakubu the convened Arewa Think Tank says they also launched enlightenment campaigns to educate the public on the advantages of the new tax regime.

Meanwhile, the National Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) warned that aspects of the reforms could negatively impact free trade zones.

The Representative noted that Nigeria has around 50 free trade zones, with only two controlled by the federal government.

They cautioned that the proposed tax changes could limit economic activities within these zones, which are designed for broader trade, not just exports.

The tax reform bills have sparked heated debate, with significant pushback from the Governors’ Forum and prominent northern politicians, including Senator Ali Ndume of Borno South.

However, at Monday’s hearing, there was no open opposition to the bills, and the Ministry of Trade and Investment called for an expanded role in the new tax regime.

The Association of Capital Market Academics of Nigeria also supported the reforms but warned that increasing VAT rates over time could discourage investment.

The public hearing on the tax reform bills continues on Tuesday.

Editor Paul Akhagbemhe