Categories of Nigerians to be exempted from paying tax in New Tax Reformed Bills revealed
In a move set to reshape Nigeria’s tax landscape, the Senate is poised to approve the much-debated Tax Reform Bills today, barring any last-minute developments.
The proposed legislation, which has sparked considerable controversy, will exempt individuals earning less than N1 million annually from the tax net, a measure aimed at alleviating the financial burden on lower-income earners.
The bills, initially met with resistance by several lawmakers, gained newfound support following clarifications from key government tax officials. These include Tanimu Yakubu, Director-General of the Budget Office; Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS); and Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
During their testimony before the Senate, these experts assured the lawmakers that the reform was designed to target wealth creation, not penalize the poor, and reiterated that those earning under N1 million would remain exempt from income tax. They also addressed concerns about the Value Added Tax (VAT) system, noting that its distribution, which currently favors states like Lagos, will be reevaluated for greater fairness.
The legislative process moved forward with renewed momentum. Deputy Senate President, Senator Barau Jibrin (APC, Kano North), who chaired yesterday’s plenary session, confirmed that debate on the bills will continue today.
It is expected that the bills will quickly proceed from first reading to an executive session and, thereafter, to a second reading and passage.
This step comes after a delay in late October 2024, when the bills were initially listed for first reading in the Senate but were postponed in favor of other legislative priorities, including the screening and confirmation of seven ministerial nominees by President Bola Tinubu.
The tax reform bills were not included in the subsequent day’s agenda, as the Senate adjourned for a three-week recess.
Yesterday’s session, however, saw a dramatic turn of events when the Tax Reform Bill unexpectedly resurfaced for debate. The surprise appearance of the bill sparked a heated confrontation on the floor, as it was not initially listed among the day’s scheduled business.
The sudden introduction led to a shouting match, with lawmakers visibly frustrated by the unanticipated move.
Tensions flared after Senate Leader, Senator Opeyemi Bamidele (APC, Ekiti Central), raised a point of order following the conclusion of other legislative matters.
Despite the uproar, the bill’s progress remains on track, with a final vote expected soon.
