In a significant move toward overhauling Nigeria’s tax system, the Nigerian Senate has approved two of the four major tax reform bills transmitted by President Bola Ahmed Tinubu. This development marks a vital step in the administration's broader agenda to modernize and streamline the country’s fiscal framework, enhance revenue collection, and strengthen the efficiency of tax administration.
The bills passed during Tuesday’s plenary session are the Nigeria Revenue Service Establishment Bill and the Nigerian Tax Administration Bill. The Nigeria Revenue Service Establishment Bill repeals the current Federal Inland Revenue Service (FIRS) Act and establishes a new body—the Nigeria Revenue Service (NRS)—as the federal tax authority. The Nigerian Tax Administration Bill seeks to harmonize and digitize tax processes across federal and state levels, eliminate redundancy, and foster a more transparent and investor-friendly tax environment.
The Senate’s consideration of the tax bills followed a clause-by-clause review in the Committee of the Whole, culminating in the third reading and final passage of the two bills. This process reflects the upper chamber’s commitment to thorough legislative scrutiny and effective policy reform in alignment with President Tinubu’s fiscal agenda.
In a related decision that has drawn widespread public interest, the Senate firmly rejected the proposed increase in the Value-Added Tax (VAT) rate from 7.5% to 10%. This move comes amid growing concerns about inflation and economic hardship facing ordinary Nigerians. Senators across party lines agreed that raising VAT at this time could exacerbate the rising cost of living and further burden citizens and small businesses already grappling with economic challenges.
Two remaining tax reform bills—the Joint Revenue Board Establishment Bill and the Nigeria Tax Bill—are scheduled for debate and potential passage on Thursday, May 8, 2025. These bills are expected to further unify the national tax structure and clarify the legal framework guiding taxation across all tiers of government.
President Bola Ahmed Tinubu had earlier transmitted the four bills to the National Assembly as part of his administration’s strategic push to increase non-oil revenue, reduce fiscal leakages, and reposition Nigeria’s economy for sustainable growth.
With Tuesday’s passage of the first two bills and the upcoming consideration of the remaining ones, the Senate appears poised to deliver on key aspects of the president’s economic reform mandate.
As stakeholders await the outcome of Thursday’s session, the legislative progress signals renewed political will to address Nigeria’s long-standing challenges in tax administration and revenue generation.