Fact-check: Is Inheritance Tax a Component of Tinubu’s Tax Reform Bill Targeting Muslims?
Claim: An article by an accounting scholar went viral on social media platforms, particularly WhatsApp, claiming that inheritance tax has been injected into the controversial Tinubu tax reform bills to pauperise Muslims.
The article circulated at a time when some Muslim leaders and scholars argued that the tax reforms, especially changes to the Value-Added Tax (VAT) distribution, might disproportionately benefit the South, which has a stronger industrial and commercial base.
President Bola Ahmed Tinubu’s Tax Reform Bill is a sweeping overhaul of Nigeria’s tax system to boost revenue, simplify compliance, and drive business growth. However, the bill has sparked controversy, particularly in northern Nigeria, where concerns abound that it may exacerbate poverty in the region.
The controversial article, which was widely circulated among Northern Muslims, was attributed to Prof. Kabiru Isa Dandago of the Department of Accounting, Bayero University, Kano. It is titled “THE RETURN OF INHERITANCE TAX THROUGH THE ‘BACK DOOR’.”
What is Inheritance Tax?
An inheritance tax is a tax on wealth transferred from a deceased person to his/her heirs. It is imposed for various purposes, including tax revenue generation for the government, wealth re-distribution, and economic growth and development.
However, the Inheritance Tax, which was introduced in Nigeria by the Military administration of General Olisegun Obasanjo in 1979 and called the Capital Transfer Tax, was repealed by the military administration of General Sani Abacha in 1993. The tax was found to be contrary to the teachings of the two main religions in Nigeria: Islam and Christianity.
Verification: To confirm the claim’s veracity, PRNigeria fact-check carefully perused the contents of the Tax Reform Bill but could not find any section where the word ‘Inheritance Tax’ is mentioned. Meanwhile, the findings reveal that section 4 of the Nigeria Tax Bill only stipulates all incomes that are chargeable to tax. In fact, Section 4(3) covers taxable income earned by a family and NOT their inheritance.
Further investigating, PRNigeria fact-check conducted keyword searches to determine the position of authorities regarding the controversies surrounding the claim. The Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele, has clarified the contentious issue surrounding the proposed tax reform bills being debated in Nigeria’s National Assembly and discussed widely across the nation.
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In a statement while addressing the controversy, Oyedele emphasised that no provision for inheritance tax exists within the current bills under review. He explained that the misconception likely stems from misinterpretations of the legislative documents or deliberate misinformation to undermine the reforms.
Oyedele added that inheritance represents a one-time transfer of wealth, either as a gift during the giver’s lifetime or upon their death. It differs fundamentally from recurring income subject to taxation under the proposed tax reforms.
He further highlighted the provisions of Section 4 of the Nigeria Tax Bill, which defines taxable income. Section 4(3), in particular, addresses taxable income earned by families, stressing that inheritance itself is not taxable under the bill. This approach aligns with existing tax laws, including Section 2(5) of the Personal Income Tax Act (LFN 2004 as amended).
Further investigation by PRNigeria led to the clarification of the Federal Inland Revenue Service Chairman, Zacch Adedeji, who said that the proposed tax reform bills will not introduce new taxes or increase existing ones. He allayed Nigerians’ fears about the possible introduction of new taxes through proposed tax reform laws during an interactive session with members of the Senate Committee on Finance two weeks ago at the National Assembly.
When PRNigeria reached out to the author of the claim, Professor Kabiru Isa Dandago, for clarification on his stance regarding the bill, he expressed his “suspicion” that efforts there could be a surreptitious move to reintroduce the abolished Inheritance Tax into the Tax Reform Bill through the “backdoor.” This concern was based on the specific choice of language in certain sections of the draft bills that he referenced.
He said he intended to seek further clarification from the federal government if he was mistaken.
Upon learning from PRNigeria that Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, had clarified that there were no plans to introduce an Inheritance Tax in the Tax Reform Bill, the author of the widely spread article emphasised the need to revise certain language in the controversial sections to reflect the Reform Bill’s true intentions accurately.
Conclusion: PRNigeria‘s findings revealed that the Tax Reform Bill does not include an inheritance tax provision, which has generated many controversies recently. Section 4(3) of the Tax Reform Bill addresses taxable income earned by families, while inheritance is not taxable.
PRNigeria, therefore, concludes that the assertion that inheritance tax has been subtly introduced into the Tax Reform Bill to undermine Muslim interests is UNFOUNDED and MISLEADING.
By PRNigeria
