Mr. Victor Muruako, Executive Chairman of the Fiscal Responsibility Commission (FRC), says tax reform bills will strengthen fiscal stability, improving efficiency, transparency, and accountability in tax collection and remittance.
Muruako stated this at a public hearing organized by the Senate Committee on Finance on four tax reform bills at the National Assembly in Abuja on Monday.
He stated that the bills’ main objectives align with the principles of the Fiscal Responsibility Act, 2007.
“In our view, the bills will enhance fiscal stability, modernize tax collection, and improve efficiency, transparency, and accountability in revenue remittance,” he said.
He added that the bills would bring the country in line with global best practices, improving Nigeria’s tax system.
“If passed, the bills will promote fiscal sustainability by diversifying revenue sources and reducing reliance on volatile oil markets,” Muruako noted.
He further explained that clearer tax laws would promote fiscal discipline, enhance transparency, and prevent unsustainable government spending.
“Additionally, the bills will encourage investment, stimulate economic growth, and create jobs, further strengthening the nation’s fiscal position,” he said.
Muruako highlighted that the bills consolidate existing tax laws into a simplified framework, reducing conflicts and complexities in implementation.
This reform will eliminate issues arising from outdated and multiple tax laws, ensuring a more streamlined tax structure.
The executive chairman said passing the bills would help citizens and businesses understand their tax obligations for timely compliance.
He noted that small businesses with annual turnover below N25 million would be exempt from corporate income tax, supporting their growth.
According to him, this exemption would create a business-friendly environment, fostering rapid expansion.
“Even the corporate tax rate for companies with annual turnover above N25 million will drop from 27.5 percent in 2025 to 25 percent subsequently.
“This reduction will ease the tax burden on companies operating in Nigeria,” Muruako added.
He said the bills introduce a progressive tax system, exempting low-income earners earning up to N800,000 per annum while imposing higher rates on higher earners.
“This ensures a fair distribution of tax responsibilities,” he explained.
He added that consolidating tax laws into a unified framework with clear enforcement guidelines would enhance compliance and reduce bureaucracy.
“There is no doubt that this will widen the tax base and increase revenue generation,” Muruako stated.
He said the proposed Value-Added Tax (VAT) increase from 12.5 percent in 2026 to 15 percent by 2030 would exclude essential commodities and exports.
Muruako added that revising the revenue-sharing formula would protect low-income earners and promote economic growth.
“These reforms, if passed, will create a more efficient, equitable, and growth-driven tax system, benefiting individuals, businesses, and the government.
“The commission fully supports these proposed reforms and urges this esteemed chamber to pass the bills into law,” Muruako said.
The News Agency of Nigeria (NAN) reports that the four tax reform bills include the Joint Revenue Board (Establishment) Bill (SB.583).
Others are Nigeria Revenue Service (Establishment) Bill, 2024 (SB.584), the Nigeria Tax Administration Bill, 2024 (SB.585) and Nigeria Tax Bill, 2024 (SB.586) (NAN)
