BEST POST I HAVE READ SO FAR ON THE TAX REFORM BILLS🔥🔥

DISSECTING TINUBU'S LANDMARK TAX REFORM BILLS (Part 1)

By @chibuzo_mikel

President Bola Tinubu on October 3, 2024 transmitted four tax reform bills to the national assembly. The bills are the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill and the Joint Revenue Board Establishment Bill. Together, these bills would overhaul tax administration and revenue generation in Nigeria as many of the provisions contained in them are landmark in nature.

These tax reforms bills did not come out from the blues, they are products of a year worth of intense hard work and consultation by the Taiwo Oyedele-led Presidential Committee on Fiscal Policy and Tax Reforms inaugurated by President Bola Tinubu in August 2023 – two months after assuming office as President. It was obvious President Tinubu saw tax reforms as one of the primary things his administration needs to achieve in order to lay a strong fiscal and revenue foundation for sustainable growth for the rest of his tenure and beyond.

This is why, in fulfilment of his campaign promise as contained in page 16 of his Renewed Hope manifesto, the President saddled the responsibility of overhauling Nigeria’s tax laws and administration on the shoulders of a renown tax expert, Taiwo Oyedele. Having gone through the entire 397 pages that make up the four tax reform bills, I can confidently say that the Committee did a wonderful job. In the first part of this piece, I will give a synopsis of the Nigeria Tax Bill 2024.

A SUMMARY OF THE NIGERIA TAX BILL, 2024

The Nigeria Tax Bill (hereinafter referred to as the NTB), is a comprehensive piece of legislation that seeks to outline all taxes in the country hitherto administered by virtue of different laws and compress them into a single simplified law. Most importantly, the NTB vests upon the Nigeria Revenue Service (expected to succeed FIRS) powers to collect all national taxes including royalties hitherto collected by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and excise duties, import VAT etc hitherto collected by the Nigeria Customs Service.

The coming into force of the Nigeria tax bill will lead to the repeal of 11 laws/enactments while 13 other laws shall experience consequential amendments. The NTB will also lead to the revocation of one subsidiary legislation and consequential amendments on two other subsidiary legislations. The laws that would be revoked once the NTB comes into effect (as currently proposed) include:

1. Capital Gains Tax Act
2. Casino Act
3. Companies Income Tax Act
4. Deep offshore and Inland Basin Act
5. Industrial Development (Income Tax Relief) Act
6. Income Tax (Authorised Communications) Act
7. Personal Income Tax Act
8. Petroleum Profits Tax Act
9. Stamp Duties Act
10. Value Added Tax Act and
11. Venture Capital (Incentives) Act.

The existing legislation that will witness consequential amendments include:
1. The Petroleum Industry Act, No 6. 2021 (the areas to be deleted in the PIA include: part I – X of chapter four; the Fifth and Sixth Schedule; paragraphs 6, 9, 10, 11 and 12 of the Seventh Schedule; and subparagraph 6 of paragraph 14 of the Seventh Schedule.
2. The Nigerian Export Processing Zones Act (sections 8 and 18(1)(a) deleted).
3. The Oil and Gas Free Trade Zone Act (sections 8 and 18(1)(a) deleted).
4. The National Information Technology Development Agency Act (sections 1, 2, and 3(3) deleted).
5. The Tertiary Education Trust Fund (Establishment, Etc.) Act (sections 1, 2, and 3(3) deleted).
6. The National Agency for Science and Engineering Infrastructure (Establishment) Act (section 20(2), paragraph b(i) and b(ii) deleted).
7. The Customs, Excise Tariffs, Etc. (Consolidation) Act (section 21(2) deleted).
8. The National Lottery Act (sections 35A, 35B and 35C deleted).
9. The Nigerian Minerals and Mining Act (sections 28 and 33 deleted).

#TaxReformBills

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10. The Nigeria Start-up Act (sections 25(2), (3), (4) and 29(3) deleted).
11. The Export (Incentives and Miscellaneous Provisions) Act (section 11(1) deleted).
12. The Federal Roads Maintenance Agency (Establishment, Etc.) Act (section 14(1)(h) deleted).
13. The Cybercrime (Prohibition, Prevention, Etc.) Act (subsections (2)(a) and (4) of section 44 and the Second Schedule are deleted).

For the subsidiary legislations, the Value Added Tax Act (Modification) Order 2021 will be revoked while the Company Income Tax (Significant Economic Presence) Order 2020 would be amended by deleting paragraph 2 even though the parent legislation, the Company Income Tax, would be repealed. Finally, the Petroleum (Drilling and Production) Regulations 1969 would be amended by deleting regulations 60B, 60C, 61(1),(2),(4) and 62.

Crucially, the Nigeria Tax Bill included a supremacy clause in section 202, part of which stated that, ”this Act shall take precedence over any other law with regards to the imposition of tax, royalty, levy, excise duty on services or any other tax, where the provisions of any other law is inconsistent with the provisions of this Act, the provisions of this Act shall prevail and the provisions of that other law shall, to the extent of the inconsistency, be void.” This clause effectively elevates the NTB to be the supreme legislation on taxes in Nigeria.

Significance of the Nigeria Tax Bill for individuals and businesses

Apart from trying to simplify tax laws in Nigeria, the Nigeria tax bill also reduced the burden of tax in most cases for individual tax payers and businesses contrary to the narrative in some quarters, amplified by Sen. Ali Ndume, that the bills are all about tax increase. I will highlight some provisions in the bill to buttress this point.

1.Reduction in Personal Income Tax: With the new provisions in the NTB, personal income tax would see a progressive reduction in rates with more lower income earners being exempt from paying PIT or paying reduced rates compared to the current rates. The annual tax rate as outlined in the fourth schedule of the bill is as follows:

a. First N800k – 0%
b. Next N2.2m – 15%
c. Next N9m – 18%
d. Next N13m – 21%
e. Next N25m – 23% and
f. Above N50m – 25%

Before now, the personal income tax rates for different bands of annual income are as follows:
a. First N300k – 7%
b. Next N300k – 11%
c. Next N500k – 15%
d. Next N500k – 19%
e. Next N1.6m – 21%
f. Above N3.2m 24%

So, a glance at the two set of rates shows that while currently a low income earner that earns N25,000 monthly, which translates to N300,000 annually is required to pay 7% income tax, the new rates proposed in the Nigeria Tax Bill exempts individuals who earn N800,000 or less annually from paying any income tax. When you consider the fact that more than 70% of Nigerians today do not earn up to N800,000 annually, you realise that the bill is actually pro-poor.

So, in effect, every minimum wage earner in Nigeria would be exempted from personal income tax. Also the bill in section 13(2a) exempts all employees of start-ups and technology-driven service providers from income tax. This is a massive incentive for youths in ICT!

The progressive personal income tax rate in the NTB means that before you get to pay the top income tax rate of 25%, your annual income must be above N50 million. In other words this new income tax regime seeks to make sure that richer people pay their fair share of tax. Before now, it is the low income earners who are employees that get to pay income tax through deduction at source carried out by their employers.

However, with the new provisions in Section 28 of the second bill called the Nigeria Tax Administration Bill, financial institutions are now mandated to furnish tax authorities details of individuals whose cumulative transactions in a month amount to N25 million or more. With this, more high income earners would be brought into the tax net.

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Here is a summary of #RenewedHope2023, the most comprehensive action plan presented by the presidential candidate of the APC, Asiwaju Bola Ahmed Tinubu, Sector by Sector.

SECURITY;

-A team called ANTI-TERRORISM BATTALION (ABATTS) will be created.🔥 -Shore up local production of ammunition to reduce dependence on foreign ammunitions.

-Improve salaries and welfare(Specially designed housing,medical & insurance package)

- Critical Infrastructure Protection Plan(CIP Plan)

-Neighbourhood watch groups

- Database Intergration

A THREAD OF SOME OF THE FACTS SAID BY @AlakeDele ON THE legendary #ABATSpaces yesterday.

Check the last thread for a cup to drop your tears🙏🏾🙏🏾

1- "Asiwaju does not care where you are from, he recognises the talent." - Dele Alake 2- “Kwashiorkor is killing your people and you said you are saving money. Government is not for saving money, it is for bettering the life of your citizens” - Dele Alake

The attack on Kalakuta by “unknown soldiers” in 1977 brought the music career of late FATAI ROLLING DOLLARS to a halt. With all his instruments burnt, it was almost the end of the road for the superstar who went on to become a guard,just to earn a living..
#ThrowbackThursday For 30 years, a career that was once the envy of upcoming musicians was dislodged and he was confined to the walls of a room face-me-i-face-u with kids. This was a man that had travelled to 8 European countries, performed before kings and even started music before Fela Anikulapo

Asiwaju spoke extensively on widening the tax net to include people like himself instead of increasing VAT and ensuring that credit facilities become a thing in Nigeria if we are to truly nip corruption in the bud. He had earlier maintained this same stance in his 9th colloquium This was a man whose only two attributes I trusted are his political prowess and “eye for talent” but never these economic reforms being churned out off the books.

“Shey na BAT be this abi na my eyes dey pain me?”

Historical Revisionism.

No human, living or dead can write the success story of the Lagos Tax Reform without majority of the credits falling back to the man who fought many battles in court to ensure LIRS became a reality in 2005, ASIWAJU BOLA AHMED TINUBU.

Thread.

https://twitter.com/Eloka51/status/1536117206471393281

The antiquated laws of the country placed the Board of Internal Revenue under the control of the federal government and it was almost impossible for States to levy additional taxes on the citizens.

Let’s do this.
1. Power: Tinubu’s government, in 2000, contracted AES to build an IPP that will generate 270MW of electricity to Lagos residents in order to exit the irrational power supply being provided by the FG. The 270MW is now part of our national grid.
First of it’s Kind

https://twitter.com/unclemidetush/status/1535323322317168643

2. Decentralisation: In order to bring governance closer to the people of Lagos state, Asiwaju created extra 36 LCDAs which led to the disagreement between Lagos and the OBJ led FG. They are still working till date. Nigeria needs someone who believes in this!
First of it’s kind