Tax Turmoil: Stakeholders Reject Key Reforms, Warn OF Economic Consequences

Since its introduction, the bill has stirred controversy, drawing opposition from various stakeholders, including some state governors and traditional rulers from northern Nigeria, who strongly disagree with key provisions.

The legislation seeks to streamline Nigeria’s tax system by repealing existing tax laws and merging them into a single legal framework. However, critics argue that certain provisions could place an excessive financial burden on businesses and individuals, while others fear it could weaken state-level tax independence.

20 Key Provisions of the Nigeria Tax Bill

The proposed bill introduces several significant changes to Nigeria’s taxation system. Below are 20 key provisions that have generated intense debate:

1. VAT Increase – Value Added Tax (VAT) will rise from 7.5% to 10% by 2025, 12.5% from 2026 to 2029, and 15% from 2030 onwards.

2. VAT Exemptions – Essential goods and services, including food, education, and healthcare, will be exempt from VAT.

3. Tax Relief for Low-Income Earners – Individuals earning ₦800,000 or less annually will be exempt from Personal Income Tax (PIT).

4. Progressive PIT System – A revised Personal Income Tax (PIT) structure will introduce lower rates for low-income earners.

5. 5% Excise Tax on Lottery and Gaming – Section 62 and Schedule 10 of the bill propose a 5% excise duty on revenue generated from lottery and gaming businesses.

6. 5% Telecoms Tax – The bill includes a 5% excise duty on telecommunications services, covering both postpaid and prepaid services regulated by the Nigerian Communications Commission (NCC)