Senate Passes Controversial Tax Reform Bills For Second Reading
The Senate on Thursday, passed for second reading the four controversial tax reform bills transmitted by President Bola Ahmed Tinubu, in September.
It was gathered that the development followed a lead debate on the bills presented by Senate Leader, Senator Opeyemi Bamidele, representing Ekiti Central and debated by other lawmakers during plenary.
Honorable Bamidele described the proposed legislation as a significant move to overhaul the country’s tax system.
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He said: “These bills aim to simplify the tax landscape, reduce the burden on small businesses, and streamline tax collection.
“In broad terms, the four bills seek to ensure uniformity in tax revenue administration in Nigeria, in line with constitutional provisions; eliminate double taxation across the country; use taxation as a tool to encourage private sector investment in critical industries; and boost disposable incomes through targeted tax exemptions as outlined in the various bills.
READ MORE: Nigerians Are In Hard Times, Tax Reform Bills Dead On Arrival At NASS – Ndume
“There is a proposal to exempt individuals earning no more than the minimum wage from Pay As You Earn (PAYE) deductions, while small businesses with an annual turnover of ₦50 million or less will also be exempt from paying taxes.
“Similarly, there is a proposed significant reduction in corporate income tax from the current 30% to 25% by 2026.
“Additionally, to address double taxation and the multiplicity of levies, multiple taxes previously paid by companies, such as the 2.5% education tax and 0.25% NASENI tax, have been harmonized into a single development levy of 2%.
“By 2030, this levy will fund the newly established student loan scheme, benefiting many Nigerian youths.”
“Unlike the current tax regime, where the Federal Government takes the lion’s share of VAT revenues, the new sharing formula proposes increasing the states’ share from the current 15% to 55%, while the Federal Government’s share will drop to 10%.
“However, the Local Governments’ share will remain unchanged. Furthermore, essential items such as food, medical services, pharmaceuticals, education fees, and electricity will continue to be exempt from VAT.”
Following a voice vote, the bills secured their Second Reading.
The Senate President then mandated the Senate Committee on Finance to review the bills and report back within six weeks.
Full Story: https://www.informationng.com/2024/11/senate-passes-controversial-tax-reform-bills-for-second-reading.html
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