NESG Supports Tax Reform Bills, Advocates for Comprehensive Legislative Review

The Nigerian Economic Summit Group (NESG) has expressed its strong support for the tax reform bills currently under deliberation in the National Assembly. The group considers the reforms a critical step towards fiscal equity, increased revenue generation, and economic transparency.

Key Tax Reform Bills
The tax reform bills, submitted by President Bola Tinubu on October 3, 2024, include:

The Nigeria Tax Bill 2024
The Tax Administration Bill
The Nigeria Revenue Service Establishment Bill
The Joint Revenue Board Establishment Bill
These proposed legislations aim to shift the tax burden to high-income earners and profitable enterprises while protecting low-income earners and small businesses.

NESG’s Perspective
Tayo Aduloju, CEO of NESG, stated that the reforms align with President Tinubu’s directive to “tax the harvest, not the seed.” Aduloju highlighted that the reforms aim to foster a fairer allocation of the tax burden while building a more robust social security system. He stressed that low-income earners and vulnerable businesses should be exempt from additional taxes.

Joseph Ogebe, NESG’s Head of Research and Development, added that initial analyses using the 2019-2020 Household Survey data indicated significant economic gains. The group plans to refine these projections with updated data from the 2022-2023 Nigeria Living Standard Survey.

Regional Concerns and Opposition
While the reforms have garnered widespread support, they have also faced criticism, particularly from northern Nigeria. Regional leaders argue that certain provisions disproportionately disadvantage northern states. NESG and the bills’ proponents have refuted these claims, emphasizing the fairness and equity embedded in the proposals.

Legislative Considerations
Acknowledging the political sensitivities of tax reform, NESG has urged lawmakers to conduct a comprehensive legislative review. The group recommends reopening public hearings to gather input from all geopolitical zones, ensuring the reforms address economic, political, and institutional concerns.

“These reforms require the spirit of federalism to succeed,” Aduloju remarked, emphasizing the importance of balancing economic imperatives with regional equity.

Broader Implications
Beyond immediate fiscal benefits, the NESG sees these reforms as a catalyst for broader discussions on fiscal federalism and governance transparency. The bills address long-standing issues such as unauthorized tax collection and the absence of VAT refund mechanisms.

Call for Constructive Engagement
Despite describing the reforms as a step forward, NESG has committed to holding stakeholders accountable. The group vowed to speak out if the final legislation fails to protect the working poor, expand the tax net, or enhance transparency.

The NESG’s endorsement of the tax reform bills underscores the urgency of implementing policies that align with Nigeria’s economic aspirations while addressing concerns of equity and justice. Stakeholders are encouraged to engage constructively to refine the legislation for maximum impact.