The belief that Nigeria must work has long fueled our collective hope. So when news broke that the Senate had passed all four tax reform bills, it felt like one of those rare moments that made you pause and wonder, “Is this really happening?” For years, the tax system has been a point of national frustration—something many had come to accept as broken. But taxation wasn’t the only concern. From power supply to education and healthcare, the shortcomings of government systems have been a persistent source of public discontent.
At the same time, Nigeria’s heavy reliance on the volatile global oil market left the country with unpredictable revenue streams and limited capacity to invest in its future. That’s precisely why our vision for a new Nigeria must remain alive—because this time, we’re seeing more than just promises. We’re seeing action.
President Bola Tinubu recognised that rebuilding Nigeria meant establishing a fair, effective, and sustainable tax system. A system that could generate stable revenue, distribute the burden justly, and rebuild public trust—regardless of region or economic status. That vision drove the introduction of the four major tax reform bills in 2024.
After months of intense policy development, stakeholder engagement, and political courage, the National Assembly has now passed all four:
- Nigeria Tax Bill 2024
- Nigeria Tax Administration (Procedure) Bill 2024
- Nigeria Revenue Service (Establishment) Bill 2024
- Joint Tax Board (Establishment) Bill 2024
These reforms are set to reduce Nigeria’s dependence on oil and empower states with the resources they need to grow and thrive.
A key highlight is the new VAT-sharing formula. Under the proposed structure, 50% of VAT revenue will be distributed equally among all states, 20% based on population, and 30% according to actual consumption. This approach is designed to ensure fairness while rewarding performance—giving each state an incentive to foster economic activity and strengthen governance.
The Senate also confirmed that the VAT rate will remain at 7.5%, resisting calls for an increase. For everyday Nigerians, that means no added cost on goods and services. Just as importantly, the bills protect the ongoing funding of vital development agencies such as the Tertiary Education Trust Fund, the National Agency for Science and Engineering Infrastructure, and the National Information Technology Development Agency. These institutions are essential to fostering innovation, education, and research nationwide.
Another major reform is the transformation of the Federal Inland Revenue Service (FIRS) into the Nigeria Revenue Service—a move that represents far more than a name change. It’s a strategic shift toward a more transparent, supportive, and efficient revenue system—one that strengthens local government finances and backs states with the tools they need to collect and manage taxes effectively.
Much of the credit goes to Dr. Zacch Adedeji, Executive Chairman of the FIRS. His leadership has been instrumental in reshaping the agency and advancing these landmark reforms. Through his efforts, we’ve seen that meaningful change is possible when those in charge are truly committed.
With the passage of these four bills, Nigeria has taken a major step toward implementing the most significant tax reform in years. The process now moves into the harmonisation stage, where both chambers of the National Assembly will align their versions of the legislation. Once agreed upon, the final bills will be sent to the President for assent and publication in the official gazette.
From there, the newly established Nigeria Revenue Service will take charge of implementation. And with Dr. Adedeji at the helm, there is strong reason to believe the results will not just meet—but exceed—expectations.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.
