The FRC’s proposed tax reform bills are designed to bolster Nigeria’s fiscal stability by modernizing tax collection processes, promoting transparency, and ensuring accountability. Key features include a progressive tax system, corporate tax exemptions for small businesses, and a planned increase in VAT. These reforms aim to diversify revenue sources and align Nigeria’s tax framework with global best practices.
The Executive Chairman of the Fiscal Responsibility Commission (FRC), Mr. Victor Muruako, stated that proposed tax reform bills aim to enhance fiscal stability in Nigeria. These reforms are designed to improve efficiency, transparency, and accountability in tax collection and remittance. Muruako made these remarks during a public hearing conducted by the Senate Committee on Finance regarding four tax reform bills at the National Assembly in Abuja.
He noted that the objectives of the bills align with the principles outlined in the Fiscal Responsibility Act of 2007. Muruako emphasized that the reforms would modernize tax collection, facilitate fiscal stability, and align Nigeria’s tax processes with global best practices, aiming for a robust tax system.
Muruako highlighted that approval of these bills could lead to increased fiscal sustainability by diversifying revenue sources and lessening reliance on the volatile oil sector. Clarity in tax laws is also expected to foster fiscal discipline, enhance transparency, and prevent unsustainable government expenditure.
The proposed reforms are expected to encourage investment, stimulate economic growth, and promote job creation, all contributing to a more stable fiscal environment. By consolidating existing tax laws into a simplified framework, the bills aim to reduce complications and conflicts in their implementation.
Muruako mentioned that if passed, these reforms would clarify tax responsibilities, aiding businesses and citizens in compliance. Small businesses earning less than N25 million annually would benefit from corporate income tax exemption to foster their growth.
He also indicated that the corporate tax rate might decrease from 27.5% in 2025 to 25%, thereby alleviating the tax burden for larger companies. The proposed tax reforms suggest a progressive taxation system, exempting individuals earning up to N800,000 per annum while instituting higher rates for wealthier earners, ensuring equitable tax responsibility distribution.
Furthermore, consolidating tax laws with clear enforcement regulations would strengthen compliance and minimize bureaucratic hurdles, increasing the tax revenue base. Muruako announced an upcoming increase in the Value-Added Tax (VAT) from 12.5% in 2026 to 15% by 2030, excluding essential goods and exports to protect low-income earners.
In concluding his address, Muruako expressed full support from the FRC for the proposed reforms, urging the Senate to expedite the passage of these bills into law. The four key tax reform bills include the Joint Revenue Board (Establishment) Bill, Nigeria Revenue Service (Establishment) Bill, Nigeria Tax Administration Bill, and Nigeria Tax Bill.
In summary, the proposed tax reform bills in Nigeria aim to strengthen fiscal stability through modernization of tax collection and improved accountability. With provisions to simplify compliance and reduce tax burdens for small businesses and low-income earners, these reforms seek to align Nigeria’s tax system with international standards while encouraging economic growth. The FRC strongly advocates for the swift passage of these legislative measures.
Original Source: nannews.ng
