Tax Reform Bills: ACF submits recommendations to N’Assembly, opposes VAT hike

The Arewa Consultative Forum (ACF) has formally submitted a comprehensive report to the National Assembly, detailing its observations and recommendations on the Executive Tax Reforms Bills.

The report, prepared by a special-purpose committee of experts, aims to overhaul Nigeria’s tax laws.

According to Prof. Tukur A. Muhammad-Baba, National Publicity Secretary of the ACF, the forum believes the proposed tax reforms have nationwide implications, not just for Northern Nigeria. “For posterity and national duty, we encourage all stakeholders to engage in discussions that will shape tax laws to serve Nigeria’s interests. Let us ensure that the tax laws we create today stand the test of time,” Muhammad-Baba said.

The ACF strongly opposes any increase in Value Added Tax (VAT), citing economic hardship faced by citizens and businesses. Instead, it recommends:

– Improved VAT Collection: Enhance efficiency in VAT collection to minimize revenue loss.

– Expanded Tax Base: Encourage private sector investments to broaden Nigeria’s tax base.

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– VAT Exemption for Agricultural Equipment: Exempt agricultural equipment from VAT to support the agricultural sector.

The ACF also recommends amending the Tax Administration Bill by changing the terms “supply and supplies” to “consumption or consumptions” for better clarity. Additionally, the forum proposes clarifying the term “Derivation” and defining its distribution based on state and local government consensus, guided by the Revenue Mobilisation and Fiscal Commission (RMFC).

Other key recommendations include:

– Street Naming and House Numbering: Implement street naming and house numbering in all towns and cities to enhance traceability of taxpayers.

– Annual Limits on Tax Exemptions & Waivers: Establish clear upper limits on tax incentives to prevent revenue loss.

– Modified Development Levy: Modify Section 69 of the Nigeria Tax Bill to create a Development Levy, shared among TETFUND, NITDA, NASENI, and the Education Loan Fund.

– Tax Records in Local Languages: Allow businesses to prepare tax returns and account records in local languages, not just English.

The ACF’s recommendations come as the National Assembly considers the Executive Tax Reforms Bills, which aim to overhaul Nigeria’s tax laws. The proposed reforms include a gradual increase in VAT, from 7.5% to 10% in 2025, 12.5% between 2026 and 2029, and 15% by 2030.

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