Speaker of the House of Representatives, Tajudeen Abbas Wednesday assured that the legislature would approach the reforms outlined in the tax bills thoughtfully, consider proposals and recommendations received from stakeholders in the final report.
Represented by the Majority Leader, Julius Ihonvbere, Abbas disclosed this while declaring open a three-day public hearing on the tax reforms bills.
He noted that the House would ensure it scrutinise the bills in the best interest of Nigerians.
“As representatives of the people, I have continued to hold the view that we must approach these reforms thoughtfully, understanding their potential implications for every segment of society. Taxes should be fair, transparent, and justifiable, balancing the need for public revenue with the burdens they impose on individuals and businesses.
“The House will, therefore, scrutinise these bills thoroughly, ensuring they align with the best interests of our constituents and the nation at large. We owe this duty to Nigerians, and as the People’s House, we must always be accountable to the people.”
He said: “As you are all aware, the tax reform bills have generated widespread debate in the media, public domain and even in private discussions, all reflecting their importance. It should be noted, however, that these debates are healthy and necessary for consolidating our democratic practice and culture.
“Therefore, the purpose of this public hearing is to foster robust discussions and harvest recommendations by providing stakeholders the opportunity to make their inputs. Importantly, this public hearing will help us identify areas requiring amendment, clarification, or improvement while also considering the compatibility of these bills with the 1999 Constitution (as amended) and other extant laws.
“We have therefore set aside three days for the public hearing to enable as many stakeholders as possible to air their views and make their recommendations.”
Speaker Abbas noted that the bills seek to “Diversify our revenue base, promote equity, and foster an enabling environment for investment and innovation.”
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He added that the Tinubu administration is “deliberate in the administration’s tax reform programme ostensibly to improve Nigeria’s tax-to-GDP ratio by streamlining and broadening the tax base.”
He said the 10th House recognises the critical importance of the tax reform bills, the anxiety among Nigerians and the desire of the government to revamp our economy through an improved tax system and resolve to ensure a thorough legislative process that is open, transparent, and inclusive.
“In every modern state, taxes are the bedrock of public revenue, providing the resources required to deliver education, healthcare, infrastructure, and security. Yet, Nigeria, despite being Africa’s largest economy, struggles with a tax-to-GDP ratio of just 6 percent, which is far below the global average and the World Bank’s minimum benchmark of 15 per cent for sustainable development. This is a challenge we must address if we are to reduce our reliance on debt financing, ensure fiscal stability, and secure our future as a nation.”
While urging the stakeholders at the hearing to approach the exercise with an open but critical mind, the Speaker also urged them to “Feel free to make insightful contributions, and raise any concerns agitating their minds on these proposed bills.”
In his welcome address, Chairman of the House Committee on Finance, James Faleke said Nigeria was in desperate need for tax reforms.
He said despite being the largest economy in Africa, Nigeria’s tax-to-GDP ratio remains one of the lowest on the continent. In 2023, data from the International Monetary Fund (IMF) showed that Nigeria’s tax-to-GDP ratio was approximately 9.4%, compared to South Africa at 21.6%, Kenya at 14.1%, and Senegal at 19.1%.
‘In 2023, the total tax or levies revenue collected by the Federal, State, and local governments ₦26.03 trillion. According to the Joint Tax Board (JTB) only about 35 million Nigerians pay tax, while only 9% of companies registered in Nigeria are captured in the tax net.
“This imbalance is unsustainable if we are to adequately fund critical infrastructure needed to build the Nigerian economy to a desirable level.
“Experts have estimated that Nigeria requires $3 trillion (₦1.8 quadrillion) over the next 30 years (that is, equivalent to $100 billion annually) to bridge its infrastructure deficit.
“However, our IGR falls significantly short of this amount, leading the government to borrow substantially in order to bridge the funding gap.
“This reality highlights the urgency of implementing tax reforms that will simplify and enhance revenue collection, reduce reliance on borrowing, and drive sustainable development”.
According to Faleke, “These four bills represent a transformative step for Nigeria’s tax system. By streamlining tax laws, improving administration, and enhancing revenue collection, they will set the nation on a path of sustainable economic growth while ensuring that taxpayers contribute their fair share.”
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