Senate Approves 2 Tax Reform Bills, Rejects Proposal to Scrap NITDA, TETFUND, NASENI
The Nigerian Senate has passed two out of four critical tax reform bills submitted by President Bola Tinubu, marking a significant step in the administration’s efforts to modernize the country’s fiscal framework.
The two bills passed on Wednesday include the Nigeria Revenue Service Establishment Bill, which repeals and replaces the Federal Inland Revenue Service (FIRS), and the Joint Revenue Board Establishment Bill, designed to harmonize tax collection across federal and sub-national levels.
However, the Senate rejected a proposed increase in the Value-Added Tax (VAT) rate from 7.5% to 10%, choosing to maintain the current rate. The lawmakers also approved new VAT input claims to cover fixed assets, overheads, and administrative services.
During the plenary, the Senate engaged in clause-by-clause deliberations, culminating in a third reading of the two bills. The remaining two bills — the Nigeria Tax Administration Bill and the Nigeria Tax Bill — are slated for debate and possible passage on Thursday.
Senate President Godswill Akpabio lauded the legislative progress, stating that the reforms would significantly improve governance and revenue mobilization.
“These bills will add immense value to governance and transform how taxes are collected and distributed in Nigeria,” Akpabio said, assuring readiness to extend plenary sittings to conclude pending work.
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The Senate also rejected another controversial proposal to phase out government funding for key development agencies, including the Tertiary Education Trust Fund (TETFUND), National Information Technology Development Agency (NITDA), and the National Agency for Science and Engineering Infrastructure (NASENI).
Instead, lawmakers approved a 4% development levy to sustain funding for these institutions. The levy will be allocated as follows:
TETFUND – 50%
Nigerian Education Loan Fund – 15%
NITDA – 10%
NASENI – 10%
National Cybersecurity Fund – 5%
Defence Security Fund – 10%
Akpabio emphasized that defunding these agencies would hinder Nigeria’s progress in education, technology, and innovation.
“These agencies are essential to human capital and economic development. Phasing out their funding would cause stagnation in education and technological advancement,” he warned.
The company income tax rate remains fixed at 30% under the revised fiscal proposals.
Deputy Senate President Barau Jibrin commended the Senate’s unity and the efforts of the Finance Committee and Elders Committee for resolving earlier disagreements that threatened the legislative process.
“There were initial tensions, but through consultations with stakeholders including religious and regional leaders, we have reached consensus,” he said.
The House of Representatives had earlier passed the four bills, which now await final harmonization and presidential assent.
By PRNigeria
