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Everything You Need to Know About Nigeria’s Proposed Tax Changes

Everything You Need to Know About Nigeria’s Proposed Tax Changes

The Nigerian government is taking bold steps to overhaul the tax system, with four new bills currently under consideration by the National Assembly. These bills aim to simplify the tax landscape, reduce the burden on small businesses, and streamline how taxes are collected. On paper, it sounds like a game-changer: a future where paying taxes is straightforward, and the system works better for everyone.

But is it all as promising as it seems?

While some Nigerians are optimistic about the changes, others are questioning whether this is the right time, especially with the rising cost of living caused by increases in electricity and fuel prices. Are these reforms the relief we’ve been waiting for, or do they risk adding more pressure to an already stretched populace?

Let’s break down the proposed bills and what they mean for you.

Here’s a closer look at the four proposed bills and how they intend to reshape Nigeria’s tax system.

  1. The Nigeria Tax Bill 2024
  2. The Nigeria Tax Administration Bill
  3. The Nigeria Revenue Service (Establishment) Bill
  4. The Joint Revenue Board Establishment Bill

What Do the Bills Aim to Achieve?

Each of these bills is designed to make Nigeria’s tax system easier to understand and more effective. Let’s break them down.

1. The Nigeria Tax Bill 2024: Simplifying Tax Laws

One of the biggest issues in Nigeria’s tax system is the confusing overlap of multiple tax laws. Small businesses, for instance, often pay taxes to federal, state, and local governments, leading to unnecessary complexity. The Nigeria Tax Bill 2024 aims to solve this by merging all tax laws into one comprehensive framework.

For individuals, the bill proposes a more progressive Personal Income Tax (PIT) system, with reduced rates for low-income earners:

  • First N800,000 – 0%
  • Next N2.2 million – 15%
  • Above N50 million – 25%
Under this structure, those earning under N800,000 annually will pay no PIT—a significant improvement from the current system. Businesses, particularly small ones, will also benefit, with the threshold for Companies Income Tax (CIT) exemption raised from N25 million to N50 million in turnover.

2. The Nigeria Tax Administration Bill: Streamlining Processes

Filing taxes can be a headache, with businesses navigating disjointed systems across various government agencies. This bill seeks to create a centralised and user-friendly process for tax registration, filing, and dispute resolution.

3. The Joint Revenue Board Establishment Bill: Strengthening Collaboration

This bill proposes replacing the ineffective Joint Tax Board (JTB) with a stronger Joint Revenue Board to improve coordination between federal and state governments. It also introduces a Tax Ombudsman to ensure fairness and protect Nigerians from unjust taxation.

4. The Nigeria Revenue Service (Establishment) Bill: Rebranding and Reorganising

This bill renames the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS) and ensures better revenue sharing between federal, state, and local governments. The proposed formula allocates 10% to the federal government, 55% to states, and 35% to local governments, giving states more resources to address local needs.

Optimism Meets Skepticism

The proposed changes have sparked mixed reactions across the country. While some believe the President is on the right track with these reforms, others argue that the recent hikes in electricity and fuel prices have already placed too much strain on citizens. Many feel the government should allow people time to recover from these economic shocks before introducing new taxes.

See some tweets below;

For more details on these tax reforms, check out the tweet thread by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, where he addresses the 10 most frequently asked questions.

The post Everything You Need to Know About Nigeria’s Proposed Tax Changes appeared first on BellaNaija – Showcasing Africa to the world. Read today!.

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