The House of Representatives Committee on Finance has proposed some major changes in the tax reform bills sent to the National Assembly by President Bola Ahmed Tinubu.
Among the changes made by the lawmakers were the rejection of the proposed increase in Value Added Tax (VAT) and discontinuation of funding for agencies such as Tertiary Education Trust Fund (TETFUND), National Information Technology Development Agency (NITDA) and National Agency for Science and Engineering Infrastructure (NASENI) by 2030.
Chairman of the House Committee on Finance, Rep James Abiodun Faleke, presented the reports on the consolidated tax reform bills to the House at the resumption of plenary on Tuesday.
The presentation of the reports followed the conclusion of a three-day public hearing on the bills and the subsequent review of the memoranda presented to the committee as well as inputs made by various stakeholders during the hearing.
The reports presented to the House include that on a “Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters (HB.1756)” (Referred: 12/2/2025).
“A Bill for an Act to Repeal the Federal Inland Revenue Service (Establishment) Act, No.13, 2007 and Enact the Nigeria Revenue Service (Establishment) Bill to Establish Nigeria Revenue Service, charged with Powers of Assessment, Collection of, and Accounting for Revenue Accruable to the Government of the Federation and for Related Matters (HB.1757)” (Referred: 12/2/2025).
“A Bill for an Act to Establish Joint Revenue Board, the Tax Appeal Tribunal and the Office of the Tax Ombud, for the Harmonisation, Coordination and Settlement of Disputes arising from Revenue Administration in Nigeria and for Related Matters (HB.1758) and a “Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation and Enact the Nigeria Tax Act to Provide For Taxation of Income, Transactions and Instruments, and for Related Matters (HB.1759).”
The House is also likely to begin the clause-to-clause consideration of the bills on Thursday.
While it was proposed in section 146 that VAT should be increased from the current 7.5 per cent to 10 per cent by 31st December, 2025; 12.5 per cent from January 2026 to December 31st 2029 and to 15 per cent from January 2030 upwards, the committee recommended that the current 7.5 per cent VAT rate be retained.
The committee also modified the clause on inheritance tax. Whereas it was proposed that an estate left by a deceased would be taxed, it has been modified to say that whoever inherits such estate or part of it as an heir and invests it in business yielding returns will now be taxed.
Similarly, Section 59 of the Nigerian Tax Bill which proposed to stop the funding of TETFUND, NITDA and NASENI by 2030 was modified by the committee, which proposed that the funding should continue, while recommending additional agencies to benefit from the 4 per cent development levy fund.
The committee recommended that the fund accruing from the 4 per cent development levies imposed on the assessable profits of all companies shall be distributed as follows — (a) Tertiary Education Trust Fund — 50 per cent; (b) Nigerian Education Loan — 3 per cent; (c)National Information Technology Development Fund — 5 per cent; and (d) National Agency for Science and Engineering Infrastructure — 10 per cent.
Others are Social Security Fund – 10 per cent; Defence Infrastructure Fund, 10 per cent; Nigeria Police Trust Fund – 5 per cent; National Sports Development Fund– 3 per cent; National Board for Technological Incubation – 3 per cent and National Cybersecurity Fund – 1 per cent.
The committee further recommended that for the purpose of this section, every beneficiary Agency and Fund in subsection (3) shall be required to prepare and submit their income and expenditure to the National Assembly for appropriation
While Section 22 of the bill proposed that “a taxable person shall, in respect of Value Added Tax (VAT), with or without a notice and whether or not an economic activity has taken place, submit a return to the Service in the prescribed form, by the date specified in subsection of this section or in a regulation issued by the Service for that purpose, the committee recommended that a taxable person shall, in respect of Value Added Tax (VAT), with or without a notice and whether or not an economic activity has taken place, submit a return to the Service in the prescribed form, on or before the 21st day of the following month.
While the Section 22 (12) proposed that “For the purpose of attribution, any return under this section shall provide details of derivation of taxable supplies by location in a manner prescribed by the Service”, the committee recommended “For the purpose of attribution, any return under this section shall provide details of consumption of taxable supplies, irrespective of where the return is filed.”
Section 7(2) of the Nigerian Tax Administration Bill proposed that “Where a relevant tax authority refuses to register or issue a Tax ID upon request under subsection (1) of this section, the relevant tax authority shall, within two working days of the decision, notify that person of the refusal. However, the committee recommended that “Where a relevant tax authority refuses to register or issue a Tax ID upon request under subsection (1) of this section, the relevant tax authority shall, within five working days of the decision, notify that person of the refusal with reasons.
Section 23 of the bill proposed that where the Service deploys an Electronic Fiscal System (EFS) any person making a taxable supply shall use the EFS for recording and reporting all supplies. It also proposed that the Service may prescribe technical specifications and security standards for using the EFS to record and report supplies. It further added that taxable persons shall be responsible for maintaining accurate records of all transactions passing through the EFS.
However, the committee recommended that, “The Service shall specify the fiscalisation system to be adopted and a transition arrangement for its implementation.”
It also recommended that (1) “Where the Service deploys an Electronic Fiscal System (EFS), any person making a taxable supply shall use the EFS for recording and reporting.”
The committee further added that “Taxable persons shall be responsible for maintaining accurate records of all transactions passing through the EFS and that the Service shall specify the fiscalisation system to be adopted and a transition arrangement for its implementation.”
Section 27 proposed that, “Every person who has an obligation to deduct and remit tax under this Act or any other tax legislation shall render monthly returns as specified in the regulation issued for that purpose.
“Every person who has an obligation to deduct and remit tax under this Act or any other tax legislation shall render monthly returns to the appropriate tax authority, as specified in the regulation issued for that purpose.
Section 56 of the Nigerian Tax Bill proposed that “Companies shall be levied, for each year of assessment in respect of total profits of every company, in the case of— (a) a small company, at zero per cent; and (b) any other company, at the rate of– (i) 27.5% in 2025 year of assessment, and (ii) 25% from 2026 year of assessment.”
However, the committee recommended that tax shall be levied, for each year of assessment in respect of total profits of every company, in the case of— (a) a small company, at zero percent; and (b) any other company, save for companies in subsection (2) of this section, at the rate of 30 per cent. It further recommended that companies operating in priority sectors as contained in the Eleventh Schedule of this Act shall be subject to income tax at the rate of 25 per cent, during the priority period.
Before the public hearing was held, there was a lot of push back on the bills, particularly from the North, with stakeholders from the region expressing concerns on some provisions in the presidential bills.
However, after series of debates and interventions, a consensus was reached between the governors and tax reform team, a development that paved the way for public hearing at the two chambers of the national assembly.
