Tales From Public Hearings on Tax Reform Bills as Labour Unions Raise Concerns

The recently concluded public hearing on the Tax Reform Bills has ignited a fierce debate among lawmakers, tax professionals, industry leaders, and religious organisations.

While the reforms aim to create a fairer and more efficient tax system, opposition from various quarters has threatened to derail the initiative.

Voices at the Hearing

President Bola Ahmed Tinubu introduced the Tax Reform Bills in October 2024 to simplify tax collection, curb evasion, and increase government revenue without overburdening citizens. 

However, as tax analyst Arabinrin Aderonke Atoyebi noted, "As with every big reform or decision, there will always be people who see change as an opportunity and those who see it as a threat."

The bills—the Nigeria Tax Administration Bill, Nigeria Revenue Service Bill, Joint Tax Board Bill, and Nigeria Tax Bill—aim to close loopholes and ensure that large corporations contribute their fair share. Dr. Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), has been a key figure in pushing for greater transparency and efficiency in tax administration. 

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"For many years, Nigeria's tax structure was inefficient, with leakages, multiple taxes, and an overreliance on oil money," Atoyebi explained.

However, strong opposition has emerged on several fronts. Religious organisations, including the Supreme Council for Shariah in Nigeria and the Committee of FCT Imams Initiative, have objected to the inheritance tax, arguing that it infringes on religious rights. 

"Inheritance tax is not a new idea; it exists globally to promote economic fairness. Nigeria is not under religious rule—our laws balance secular and customary principles," Atoyebi countered, suggesting adjustments rather than outright rejection.

Labour unions  raise concerns

The Trade Union Congress (TUC) and other labour groups fear the proposed increase in Value-Added Tax (VAT) from 7.5% to 15% by 2030 will exacerbate the cost-of-living crisis. 

While acknowledging their concerns, Atoyebi argued that "a gradual increase, with exemptions for basic goods, can ease the impact," citing global examples where VAT funds public services.

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Another point of contention came from the Nigeria Customs Service, which argued that the reforms could interfere with its operational duties. 

But Atoyebi dismissed this fear, stating, "This is not about power struggles; it's about making things work better. The reforms will help government agencies collaborate more effectively and fix long-standing revenue collection problems."

Despite the fierce opposition, supporters insist that the reforms are necessary. "Fighting change will only slow down progress," Atoyebi warned, urging lawmakers to refine the bill rather than discard it. 

"Those against it should ask themselves: Do we want a Nigeria where the rich avoid taxes while ordinary people struggle? Do we want to keep losing revenue due to loopholes? Or do we want a fair system where everyone contributes to national growth?"

With the Senate and House of Representatives now reviewing the bills, the next phase will determine whether Nigeria embraces this critical tax reform or succumbs to resistance.

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"This reform will enhance the economy, create a fairer tax system, and improve livelihoods. If implemented effectively, it will ensure that the benefits of democracy reach everyone, not just a select few," Atoyebi concluded. 

These deliberations could shape Nigeria’s financial future, determining whether the country takes a bold step towards tax justice or remains entangled in outdated and inefficient systems.

FIRS Rakes in N5.5 trillion in tax revenue in 6 months

Legit.ng previously reported the Federal Inland Revenue Service (FIRS) collected a total tax revenue of N5.5 trillion for six-month period from January to June 2023.

Legit.ng earlier reported that FIRS set a new record after collecting over N10 trillion in revenue in 2022. It was the first time the revenue agency crossed the N10 trillion mark in tax revenue collection.

The agency's realisation of this feat is coming despite the fact that Nigerians have been plagued by several economic hardships in the course of the six months including naira scarcity, inflation, fuel subsidy removal and high petrol prices.

Source: Legit.ng