The proposed tax reform bills in Nigeria have sparked discussions on their potential effects, particularly on the Nigeria Customs Service. While stakeholders advocate for improved tax efficiency and alignment with global standards, concerns about financial burdens and operational conflicts loom large. Experts urge careful assessment and necessary amendments to align reforms with existing customs legislation.
The public hearing on Nigeria’s proposed tax reform bills has ignited discussions among stakeholders, including associations, agencies, experts, and government officials. The bills, submitted by President Bola Tinubu on October 3, 2024, aim to revamp Nigeria’s tax administration and enhance revenue generation through four specific proposals: the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
During the hearings, proponents expressed optimism that the reforms will standardize Nigeria’s tax system to align with global best practices, enhancing transparency, accountability, and overall fiscal stability. Analysts believe that a restructured tax framework could reduce inconsistencies, strengthen macroeconomic resilience, and promote economic growth. However, concerns persist regarding specific provisions that may obstruct effective implementation.
Critics caution that, if unaltered, the reforms could burden citizens financially, deter investments, and undermine the operational relevance of certain government agencies. Particularly, the Nigeria Customs Service (NCS) is highlighted as potentially affected, since the tax reform could modify operational processes and legal responsibilities crucial for trade regulation enforcement.
Experts argue that revising tax policy must integrate customs administration effectively, as misalignment could disrupt customs procedures, trade agreements, and border management. There’s concern that some reform provisions clash with the NCS Act of 2023, potentially leading to enforcement challenges and operational inefficiencies within the agency.
The Association of Nigerian Licensed Customs Agents (ANLCA) noted the NCS Act’s implementation began in 2024 following extensive legislative work spanning over eight years. ANLCA’s National President, Mr. Emenike Nwokeji, warns that repealing the act could severely affect customs operations, undermining efforts to stabilize the agency’s functions and compliance issues in import duty collection.
Nwokeji outlined that with only 15% of the NCS Act implemented, introducing new tax reform legislation centralizing revenue could generate significant conflicts unless amended. He advocates for the government’s prioritization of NCS stability while improving coordination among revenue agencies.
Mr. Okey Ibeke, a customs and tax expert, echoed the risks linked to the reforms, emphasizing the NCS’s multifaceted responsibilities that extend beyond revenue collection. He raised alarms about the financial strain on new revenue bodies to effectively manage customs operations, cautioning that they may lack the specialized knowledge required to handle complex tasks like assessing imports.
IBeke detailed that customs operations hinge on detailed processes like Rules of Origin for product verification, which may be too intricate for newly designated agencies lacking proper training, leading to revenue losses.
Moreover, Ibeke drew attention to the NCS’s strides in modernization through the Trade Modernization Project, warning that repealing the act could reverse progress. He recommended a balanced method to reform the tax system without undermining the crucial functions of revenue agencies.
The Customs Consultative Committee (CCC), represented by Secretary Dr. Eugene Nweke, also raised issues regarding legislative inconsistencies and operational risks, advocating for maintaining NCS autonomy while enhancing the Customs Modernization Project through public-private partnerships.
In contrast, the Comptroller-General of Customs, Adewale Adeniyi, acknowledged that updating Nigeria’s tax laws was essential in light of contemporary fiscal challenges and economic changes. He expressed hope that reforms could foster economic growth while urging that any new legislation aligns with the NCS Act to ensure the agency retains its core mandates and operational efficiency.
The ongoing debate surrounding Nigeria’s proposed tax reform bills highlights significant concerns regarding their potential impact on the Nigeria Customs Service and broader tax administration. While stakeholders recognize the need for modernization and alignment with global best practices, fears of increased financial burden on citizens and operational inefficiencies persist. As experts urge careful consideration and amendments to integration strategies within the broader fiscal landscape, the future effectiveness of these reforms remains contingent upon ensuring they support rather than compromise the essential functions of the NCS.
Original Source: nannews.ng
