The Nigerian Senate on Wednesday passed two tax reform bills put forward by President Bola Tinubu, marking a major milestone in the government’s efforts to modernize the nation’s tax structure. However, the upper chamber declined a controversial proposal to raise the Value-Added Tax (VAT) from 7.5% to 10%, citing concerns about its potential impact on the economic well-being of Nigerians.
The Joint Revenue Board (JRB) Establishment Bill and the Nigeria Revenue Service (NRS) Establishment Bill were both approved. Both are essential components of the President’s larger fiscal reform plan, which seeks to improve public finance management and increase revenue production.
The legislative approval followed a two-hour deliberation on the report submitted by the ad hoc committee led by Senator Sani Musa (Niger East), who had been tasked with reviewing the bills and resolving areas of contention. The session, which ran until 5:30 p.m., culminated in a voice vote that saw majority support for the two bills.
Senate President Godswill Akpabio commended his colleagues for their diligence, emphasising the transformative potential of the new laws.
“These bills will revolutionise tax administration and improve governance in Nigeria, I commend all senators for their commitment in producing legislation that reflects the collective interests of Nigerians.” Akpabio Stated.
While expressing confidence in completing work on the remaining two bills, Akpabio announced that the Senate would reconvene on Thursday at 12 noon to continue deliberations, even if proceedings extend late into the night.
Deputy Senate President Barau Jibrin also praised the chamber’s ability to navigate early disagreements through constructive dialogue.
“It’s normal to have divergent views, especially on sensitive fiscal matters. Thanks to the wisdom of the Finance Committee and the Committee of Elders, we reached a consensus through engagement with critical stakeholders, including religious leaders, regional bodies, and the Nigerian Governors’ Forum.” Jibril noted.
He described the outcome as a testament to the maturity and democratic spirit of the 10th Senate.
The rejection of the proposed VAT increase comes amid heightened public concern over inflation and the rising cost of living. Lawmakers unanimously agreed that raising taxes at this time would further strain Nigerian households and businesses.
All four tax reform proposals had already been approved by the House of Representatives. Two of them have received Senate approval, paving the way for eventual presidential assent and harmonization, which would bring about a reform of Nigeria’s tax collection and distribution system.
