Tax Reform Bill Gets Thumbs Up From NEITI, But Raises Important Concerns

The Nigeria Extractive Industries Transparency Initiative (NEITI) has expressed its support for the Tax Reform Bill proposed by the Presidential Committee on Fiscal and Tax Policy Reform.....KINDLY READ THE FULL STORY HERE▶

However, NEITI highlighted the need for clarifications on certain clauses within the bill to avoid poor implementation and administrative conflicts.

One of the key concerns raised by NEITI is the potential impact of the bill on startups in various sectors of the economy if passed in its current form.

In a statement signed by its Executive Secretary, Dr. Ogbonnaya Orji, and addressed to the leadership of the National Assembly and Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, NEITI outlined its observations.

NEITI’s spokesperson, Obiageli Onuorah, stated, “The bill has the potential to modernize Nigeria’s tax system, streamline its administration, and broaden the tax base to align with global best practices. A detailed review of the bill shows its potential to boost revenue generation, enhance household livelihoods, create jobs, and provide overall economic opportunities.”

NEITI further noted that its section-by-section review of the draft law identified both strengths and weaknesses, particularly concerning the extractive industries, which are at the core of NEITI’s mandate.

“For example, Sections 1 and 2 seek to establish a unified tax legislation across Nigeria for all individuals and legal entities. However, they lack explicit guidelines to harmonize federal and state tax laws and provide clarity on the roles of sub-national governments,” the statement read.

On unifying tax administration, NEITI stressed the importance of managing the transition carefully and conducting robust public awareness campaigns to prevent administrative confusion.

Additionally, for tax laws applicable to the oil, gas, and mining industries, including issues related to income tax, petroleum operations, VAT, and tax incentives, NEITI recommended introducing clauses to address alignment with state tax systems and provide guidance on resolving jurisdictional conflicts.