Daniel Bwala, Special Adviser on Policy Communication to President Bola Tinubu, recently defended the tax reform bills currently under consideration by Nigeria’s National Assembly.
Bwala clarified that these bills align with President Tinubu’s manifesto and campaign commitments, reflecting the administration’s dedication to creating a fairer and more efficient tax system in Nigeria.
Bwala explained that the proposed reforms, such as the amendment to how Value Added Tax (VAT) revenue is distributed, are aimed at promoting equitable taxation across the country. According to him, these changes are not politically motivated but are essential components of Tinubu’s vision for a modernized tax framework.
The legislative package includes several critical bills. First, the Nigeria Tax Bill 2024, which seeks to create a comprehensive fiscal framework for taxation across the country. Then there’s the Tax Administration Bill, intended to standardize tax laws to minimize disputes and confusion. The Nigeria Revenue Service Establishment Bill is also part of the reforms, which would replace the existing Federal Inland Revenue Service (FIRS) with the new Nigeria Revenue Service (NRS) to improve tax administration. Finally, the Joint Revenue Board Establishment Bill aims to set up both a tax tribunal and a tax ombudsman to enhance oversight and accountability.
Speaking on Trust TV’s Sunday Politics, Bwala underscored that the push for these reforms stems from President Tinubu’s commitment, not from any personal agenda. He noted, “During his campaign, Tinubu promised these reforms, which were clearly laid out in his manifesto. He is now working to fulfill that promise by creating policies designed to benefit Nigerians across the board.”
Bwala further addressed concerns, especially among some stakeholders in northern Nigeria, who fear that the tax reforms are unfairly directed against the region. He argued that these concerns arise largely from misinformation and political manipulation. “Unfortunately, some are politicizing the tax reform bills without fully understanding them. In reality, several proponents of these reforms are from the North, and the bills themselves are about unifying tax laws to streamline tax administration nationwide,” he noted.
The reforms, according to Bwala, are divided into four main parts, each targeting specific areas of improvement. He highlighted the Nigerian Tax Bill as the foundation of the new system, serving as the primary guide for tax policy in Nigeria.
One of the significant benefits, Bwala emphasized, is tax relief for low-income earners. Under the new system, individuals earning below N800,000 annually would be exempt from paying tax, a measure designed to ease the financial burden on those with lower incomes. Previously, even individuals in this income bracket were required to contribute a portion of their earnings as tax.
Moreover, the tax reforms propose that individuals earning over N50 million annually would pay a 25% income tax rate, ensuring that the tax structure is progressive and that higher earners contribute more. Businesses would also benefit, as companies with annual incomes below N50 million would be exempt from income tax. Additionally, the corporate income tax rate for larger companies would be reduced from 30% to 25%, aiming to stimulate business growth and economic development.
Bwala elaborated on the diverse benefits of harmonizing tax laws. “These reforms are designed to support private citizens, salaried workers, and entrepreneurs, particularly those in small and medium-sized enterprises (SMEs). By encouraging the growth of SMEs, we can help boost the economy at the grassroots level,” he explained.
The streamlined tax framework would also simplify tax compliance for companies, regardless of size, and remove redundancies across different tax laws. This coordination would prevent overlapping tax requirements that currently burden Nigerians and complicate tax administration.
Bwala concluded that Tinubu’s administration is working toward a coordinated, modern tax system that reduces complexity and promotes fairness, aligning with the president’s vision for economic reform and sustainable growth across Nigeria.
