The new tax laws are expected before the end of this year, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said yesterday.
According to him, ten amendment bills have been sent to the National Assembly to address constitutional issues, including overlapping taxing rights. He said the committee drafted new tax bills instead of amending old ones.
“We took the view that amending outdated laws inherited from our colonial past was insufficient. Instead, we drafted new laws entirely. Our goal is to ensure clarity and avoid the suffering caused by conflicting taxes such as VAT and state-level consumption taxes,” Oyedele said.
Oyedele said the comprehensive reform approach is expected to culminate in the enactment of new laws by the end of the third quarter that some reforms, like the withholding tax regulation, may take effect this year.
He also said the collection of VAT on food items, healthcare, housing, education and transportation will soon end under a new policy. He added that states will get a VAT revenue boost by 90 per cent if they agree to discontinue the collection of consumption taxes. He believes the proposed VAT increase will benefit state governments if they accept the collection adjustment.
He added that “We asked the states to discontinue consumption taxes as they are duplicating VAT. In compensation for that, their share of VAT revenue will go up to 90 per cent. The five per cent added is more than double what they collect as consumption taxes, so it is a win-win for them.”
Oyedele said President Bola Tinubu has approved a new withholding tax policy, which replaces the one introduced in 1977. The new policy introduces significant reforms designed to alleviate the heavy burden that the previous system imposed on farmers and Small and Medium Enterprises (SMEs).
According to him, small businesses will now be exempt from withholding tax compliance, reducing their administrative and financial burdens.
