Tax Reforms Bills: FG targets July 1 for take-off
The Federal Government is set to commence the implementation of its tax reforms on July 1, 2025. These reforms are outlined in four key bills currently awaiting approval by the National Assembly, according to Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee.
Speaking at “The Platform” event in Lagos, Oyedele revealed that the bills are expected to be passed by the end of March, paving the way for necessary preparations in the second quarter of the year. He described the reforms as transformative and long overdue, stating, “These reforms, which haven’t been done since independence, will structurally benefit Nigeria and reduce the pressure on policy authorities.”
Last week, the reforms received the endorsement of the Nigerian Governors Forum (NGF) following months of intense negotiations and consultations. The Senate also hailed the NGF’s approval as a significant step forward but emphasized its commitment to gathering further public input on the legislation.
The NGF’s proposed amendment to the Value-Added Tax (VAT) sharing formula was accepted by Oyedele’s committee. While the committee initially suggested 20% equality, 60% derivation, and 20% population, the governors revised it to 50% equality, 30% derivation, and 20% population. Oyedele noted that reforms are not just about technical correctness but also require political considerations.
He highlighted the expected benefits of the new VAT-sharing formula, particularly for sectors like agriculture and manufacturing, and encouraged stakeholders to pay attention to the incentives outlined in the bills.
Addressing Nigeria’s economic challenges, Oyedele commended the Tinubu administration’s economic reforms, including the removal of fuel subsidies, which he described as a bold and necessary move. “We were living on an illusion of stability,” he said. “Removing subsidies has allowed us to confront our economic realities and move toward sustainable growth.”
Read also:Governors unite with Presidency in supporting Tax Reform Bills
He added that Nigeria’s economy was previously burdened by unsustainable debt servicing and inflation caused by excessive money printing. However, he expressed optimism, saying, “The worst is behind us. The economy is beginning to recover, and we are now focused on rebuilding.”
The Senate, which resumes sitting on January 28, has committed to expediting work on the tax reform bills. Senator Adeyemi Adaramodu, Chairman of the Senate Committees on Media and Public Affairs, stated that the NGF’s endorsement has bolstered confidence in the legislative process.
“We have already referred the bills to the Committee on Finance after the second reading,” Adaramodu said. “Public hearings will still be held to gather inputs from stakeholders and ensure the final legislation reflects a wide range of perspectives.”
Adaramodu assured that the passage of the 2025 Appropriation Bill would clear the way for fast-tracking the tax reform bills. He described the governors’ endorsement as a “great elixir” for smooth passage, given their critical role in implementing the reforms at the state level.
The reforms are anticipated to address structural inefficiencies, boost government revenue, and redirect incentives to vital sectors, ultimately fostering long-term economic stability and growth.
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