Presidency Explains Tinubu’s Motives for Introducing Tax Reform Bills

The Presidency has clarified the rationale behind President Bola Tinubu’s introduction of tax reform bills, emphasizing their potential to create a more efficient and equitable tax system aimed at driving national development.

According to Sunday Dare, Special Adviser on Public Communication and Orientation, the reforms seek to address inefficiencies in Nigeria’s current tax structure, where over 80% of the 61 existing taxes are considered redundant. The plan focuses on transitioning from voluntary compliance to a structured corporate taxation model, ensuring a broader and more sustainable revenue base.

Dare highlighted Tinubu’s success in implementing similar reforms during his tenure as governor of Lagos State from 1999 to 2007, which increased the state’s internally generated revenue from ₦600 million to an amount surpassing the combined revenue of at least 15 states.

The proposed tax system aims to ease the burden on the poor while focusing on prosperity-based taxation. Key provisions include exempting individuals earning below ₦1 million and businesses with profits under ₦50 million from taxation. Additionally, the Pay As You Earn (PAYE) tax will be abolished, and states will play a greater role in revenue generation under a framework promoting fiscal federalism.

The bills, which include the Joint Revenue Board of Nigeria Bill, Nigeria Revenue Service Bill, Nigeria Tax Administration Bill, and Nigeria Tax Bill (all 2024), have passed their second reading in the Senate but face opposition from groups like the Northern Governors Forum and the National Economic Council (NEC), particularly over Value Added Tax (VAT) provisions.

Dare reassured the public that Tinubu remains open to feedback and is committed to refining the proposals to ensure fair implementation. He stressed that the reforms are designed to foster development without imposing additional hardship on vulnerable populations.