Senate retains VAT at 7.5%, passes two tax reform bills

Senate on Wednesday rejected a proposal to increase the value-added tax (VAT) to 10 percent, opting to retain the current rate at 7.5 percent.

This is even as the Senate passed two out of four major tax reform bills proposed by President Bola Tinubu.

The two bills passed are the Nigeria Revenue Service Establishment bill, which repeals the Federal Inland Revenue Service, and the Joint Revenue Board Establishment bill, which seeks to harmonise tax collection.

The remaining two bills which the senate  scheduled for consideration and passage on Thursday are the Nigeria Tax Administration bill and the Nigeria Tax bill.

The passage of two bills on Wednesday followed a clause-by-clause consideration of the bills in the committee of the whole and a third reading on the floor of the senate. 

The bills had generated heated debate in the polity, thereby forcing the Senate to defer legislative work on them, including organising a public hearing.

However, following wide consultation by the Senate with critical stakeholders and the intervention of the Nigeria Governors’ Forum, the clauses containing the proposals for VAT collection and administration, which had generated a lot of criticism, were amended.

The recommendations of the NGF led to the continuation of legislative work on the bills by the Senate after a long delay.