Analysts applaud proposed tax reforms, call for PIT review

Public Policy analysts and economic experts have applauded the tax reforms bill sent to the Senate by the Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele.

At the TAX Reforms Town Hall held by Channels, Paul Alaje, an economist, who rated the reforms a seven over 10, said that the bill may have some grey areas, but they do not require a complete withdrawal.

Instead, he opined that issues like Value Added Tax and Personal Income Tax be reviewed in favour of more low-income earners.

“A lot of work has gone into this bill. The issue of VAT should be carefully thought through. Think of our income capacity as a country, our GDP lost 50 percent of its shares from 400 billion to 200 billion, thanks to the exchange rate. Instead of going directly to 15 per cent, let’s have a lower rate for low-income earners,” he said.

Read also: Obi to Tinubu: Don’t rush tax reform, conduct public hearing

Also, Chibuzor Micheal, public policy analyst, said that the bills present Nigeria with an opportunity to harmonise her complex tax laws.

“These bills will harmonise the complex tax laws and simplify the processes. On the issue of VAT, we’re about to hit N6 trillion in VAT collection judging by the data, and states get the bulk of their revenues through VAT, but it’s still less than $4 billion, and it speaks to the fact that Nigeria has a revenue problem,” he said

“We’re about to present a budget of N9 trillion less than 28 billion dollars to the National Assembly, but South Africa has a budget of $300 billion while the homeland department in the US spends close to $176 billion. We need to reorganise our revenue stream,” he added.

Meanwhile, Baba Yusuf, Group CEO, Global Investment and Trade Company, stated that the review of VAT attribution would benefit Northern states more than any other state, as it speaks to balance and equity.

“This reform is one of the best reforms undertaken by President Tinubu. The Nothern Nigeria will be one of the best beneficiaries of this reform. It is a reform of balance, it speaks to equity, and data and has provided a platform going forward,” he said.

“Over 70 percent of the poor population are from the core North, and it means they’ll benefit from the tax exemptions. I am a strong proponent of allocation by consumption because commission collection will make people lazy,” he added.

In October 2024, President Tinubu asked the national assembly to consider and pass four tax reform bills which include the Nigeria tax bill, tax administration bill, and the joint revenue board establishment bill.

The reforms also propose to replace the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service.