On Thursday, Nigeria’s lower house of parliament approved four tax reform bills aimed at overhauling the tax system, despite some alterations, including maintaining VAT at 7.5% and capping revenue allocation for high-revenue states. The reforms focus on increasing VAT, restructuring tax collection, and revising petroleum profit taxes, awaiting upper house passage and presidential approval for enactment.
Nigeria’s lower house of parliament approved four significant tax reform bills proposed by President Bola Tinubu, marking a notable advancement in reforming the nation’s tax system. Notwithstanding these advancements, several measures were altered from their original proposals. Presently, Nigeria, which has the lowest tax-to-GDP ratio globally at 10.8%, relies heavily on borrowing to support its budget.
The passage of these tax reform bills signifies a critical step towards enhancing Nigeria’s tax efficiency and revenue generation. Despite adjustments made by lawmakers, the proposed measures aim to create a more equitable tax system that includes global minimum tax provisions and restructured VAT allocations. The upcoming approval from the upper house and presidential assent will determine the implementation timeline of these reforms.
Original Source: www.marketscreener.com
