Economists, Bismarck Rewane and Biodun Adedipe have expressed optimism about the tax reform bills currently before the National Assembly.
They shared their thoughts on the tax reform bills at the FirstBank Nigeria Economic Outlook 2025 which was held in Lagos on Wednesday under the theme, ‘Nigeria 2025: Path to Economic Rebound & Recovery.’
In October, President Bola Tinubu sent four tax reform bills to the National Assembly for consideration. The proposed bills include the Nigeria Tax Bill 2024, which aims to establish a comprehensive fiscal framework for tax regulation, the Tax Administration Bill seeks to provide a clear and concise legal structure for managing taxes in Nigeria to reduce disputes and enhance efficiency, the Nigeria Revenue Service Establishment Bill and the Joint Revenue Board Establishment Bill which proposed the creation of a tax tribunal and a tax ombudsman to address tax-related matters.
Sharing his thoughts on the bill and possible impact, Rewane, who is the Managing Director of Financial Derivatives, said, “ Basically, the Nigerian government is obsessed with revenue. They need to increase the revenue-to-GDP ratio, and so, once it is easy to administer that is the two things that they consider. But the thing about revenue-intensive taxes is that by nature, they are regressive. Therefore, you’re going to have this sales tax. VAT. It also takes away money from consumers and gives to the government.
Secondly, what does the government do with the money? Is it transparent? Is it efficient? Is it adding to productivity and output by doing certain things? Is the government multiplier as efficient as the investment multiplier? So I think that is key. The local governments are going to be important in this new dispensation. It’s a policy announcement that must be backed with institutional reforms. We must curtail government profligacy.”
Another economist, Biodun Adedipe, during the panel discussion at the Outlook event, highlighted two things that he said were instructive with the tax reform bills.
“The first thing for me is the reduction in the number of taxes from about 62 to nine. Secondly is the way that proceeds have been shared under the current dispensation. That is also going to change, putting more money at subnational levels than we are currently.
“So, if I drink Coca-Cola in Katsina, the VAT paid will not be attributed to Lagos because the headquarters of the company paying is in Lagos. There will be a portion attributed to Katsina where it was consumed. That’s the biggest shift, and, makes it more equitable,” he said.
The Deputy Managing Director, FirstBank, Ini Ebong, in his closing remarks, expressed optimism that the insights from the event would guide the bank’s customers and other stakeholders on how to position themselves strategically for success.
“2025 promises to be a very interesting year of economic rebound and recovery over the years, First Bank has remained committed to being a partner in progress for Nigeria’s economic advancement. I remind you that’s 130 years of actively supporting businesses and individuals in navigating challenges and maximising opportunities. Today’s discussions have not only provided valuable insights into the trajectory of the Nigerian economy, but have also reports the importance of collaboration between policymakers, private sector leaders, and other key stakeholders in achieving sustainable growth,” he said.
