Nigeria’s House of Representatives has considered and adopted reports on the new Tax Reform Bills presented by its Committee on Finance.
Chairman of the Committee, James Faleke, while presenting a synopsis of the Reports at plenary, explained that all contentious sections in the various Bills had been amended to align with recommendations from the Public hearing
On the contentious Value Added Tax (VAT) sharing formular, which generated heated debate in the House, Faleke further explained that the Section has been amended to reflect that it would be divided among States as follows: 20% by population, 50% by equality, and 30% by Consumption (through the actual place of consumption irrespective of where the returns are filed).
The VAT rate was amended to retain the current 7.5% as opposed to the proposed staggered increase to 15% by 2030.
The Report also proposed an extension of Tax exemption to specific agricultural businesses in the first five years of commencement. The specific agricultural sub-sectors include livestock, forestry, dairy, animal feed, and cocoa processing.
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The wages and salaries of Military officers have also been proposed to be exempted from personal income tax.
The new Bills when passed into law, will repeal the following legislations:
- Companies Income Tax Act (CITA) – 1979
- Value Added Tax Act (VAT Act) – 1993
- Personal Income Tax Act (PITA) – 1993
- Federal Inland Revenue Service (Establishment) Act – 2007
- Capital Gains Tax Act – 1967
- Stamp Duties Act – 1939
- Casino Act – 1965
- Deep Offshore and Inland Basin Act
- Industrial Development (Income Tax Relief) Act – 1971
- Petroleum Profits Tax Act – 1959
- Venture Capital (Incentives) Act – 1993
This expected repeal has led to the amendment of the following laws:
- Petroleum Industry Act, 2021
- Nigeria Export Processing Zones Act
- Oil and Gas Free Trade Zone Act.
- National Information Technology Development Agency Act
- Tertiary Education Trust Fund (Establishment, Etc.) Act
- National Agency for Science and Engineering Infrastructure (Establishment) Act
- Customs, Excise Tariffs, Etc. (Consolidation) Act
- National Lottery Act 2005
- Nigerian Minerals and Mining Act, 2007
- Nigeria Start-up Act, 2022
- Export (Incentives and Miscellaneous Provisions) Act
- Companies Income Tax (Significant Economic Presence) Order 2020
- Petroleum (Drilling and Production) Regulations 1969
- Value Added Tax Act (Modification) Order 2021 is revoked.
ait.live Correspondent in the Nigerian National Assembly reports that the new Tax Bills are expected to pass through Third reading at the House of Representatives plenary by next week.
(Editor: Ken Eseni)
