The Chartered Institute of Taxation of Nigeria (CITN), has said ongoing tax reforms by the Government would go a long way to improve revenue generation and create a robust tax system for the country.

 

The Institute according to its President/Chairman of Council, Samuel Agbeluyi,
is closely monitoring and contributing its quota to current activities of the current government as it relates to taxation and fiscal policy modifications.

 

It is not in doubt that the since its inauguration in May 2023, the current Nigerian government has demonstrated the political will and a strong commitment to overhauling the nation’s tax system, to reduce dependency on oil revenues and promote fiscal stability, Agbeluyi, said.

 

Speaking during the 4th Presidential Press Briefing and Media Workshop in Lagos, the President said that through a series of deliberate policy reforms, legislative actions and administrative measures, the government has sought to diversify the revenue base, improve tax compliance and support economic growth.

 

Highlighting issues around the introduction of Executive Orders and Tax Relief Measures by President Bola Tinubu, the CITN President recalled that on July 6, 2023, Tinubu signed four executive orders that included significant tax relief measures.

 

Among these were the suspension of the 5 per cent excise tax on telecommunications services and the escalation of excise duties on locally manufactured products.

 

The Federal Government also suspended the Import Adjustment Tax (IAT) on certain vehicles and the green tax on single-use plastics (SUPs).

 

These actions in his opinion were aimed at reducing the tax burden on consumers and businesses while stimulating economic activity.

 

In addition the Presidential Fiscal Policy and Tax Reforms Committee was inaugurated on August 8, 2023, with a mandate to address critical challenges in fiscal governance, revenue transformation, and economic growth facilitation. The Committee’s work has been structured into three phases: quick wins, critical tax reforms, and full implementation.

 

These phases are designed to deliver immediate improvements in tax administration, followed by more comprehensive reforms over a longer timeline.

 

Equally, on December 2023, the Government issued a circular on “Fiscal Incentives for the Presidential Gas Growth Initiative,” aimed at stimulating the growth of the gas sector.

 

This initiative included import duty waivers and zero-rated VAT for key components and services related to Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG), reflecting the government’s commitment to leveraging the gas sector for economic development.

 

Extension of the effective implementation date of the Finance Act 2023

 

Signed into law by President Tinubu on December 31, 2023, the Finance Act 2023 introduced several amendments to existing tax laws.

 

These include: Requiring non-resident shipping and air transport companies to submit detailed gross revenue statements for their Nigerian operations.

 

Authorizing regulatory agencies to require evidence of income tax filing and tax clearance certificates (TCC) before issuing operational approvals to shipping companies and airlines, Deleting the provision for reconstruction investment allowance on qualifying plants and equipment, thereby streamlining tax incentives, Deduction at Source (Withholding Tax) Regulations 2024.

 

Also, he recalled that in June 2024, the Minister of Finance issued new regulations to clarify the rules for withholding tax deductions across various tax regimes, including companies’ income tax, capital gains tax, individual income tax, and petroleum profits tax.

 

The regulations also aimed to reduce withholding tax rates for low-margin businesses, promote ease of compliance, and align with global best practices.

 

Another key intervention took place in October 2023, when the Federal Inland Revenue Service (FIRS) introduced enhancements to the TaxProMax system, including the implementation of a Tax Wallet feature that allows taxpayers to make partial payments of outstanding liabilities.

 

This move was part of the government’s broader effort to make tax compliance easier and more flexible for businesses.

 

There is also the implementation of Tax Concessions and Penalty Waivers including the suspension of deduction of VAT on Diesel imports and local sales which seeks to reduce the impact of fuel subsidy removal, that prompted the Federal Government to waive VAT on diesel for a period of six months to offer respite to businesses and generality of Nigerians.

 

Agbeluyi, also recalled that in June 2024, President Tinubu signed the Inflation Reduction and Price Stability Order, directing the Ministry of Finance and the Central Bank of Nigeria to devise plans for offering low-interest loans to key sectors such as agriculture, pharmaceuticals, and manufacturing. This order also suspended import duties, VAT, and other tariffs on essential goods and inputs for six months, further demonstrating the government’s commitment to supporting economic stability.

 

After painstaking and exhaustive work, the output and recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms has given rise to the Economic Stabilization Bills currently under legislative consideration and scrutiny at the National Assembly, he added.

 

However, he said that as expected with major tax reforms anywhere, it has elicited a lot of concerns and reactions from stakeholders.

 

“CITN welcomes this great effort by the current government in envisioning and pushing for these tax reforms which are necessary at this point in our national life.

 

“The Bills are capable of transforming the tax space in Nigeria, addressing systemic challenges that have bedeviled the effectiveness of our tax system and to engender an enabling environment for businesses to thrive.” he said.

 

The Institute he said welcomes the interest of stakeholders in the Bills as it is part of the process of ensuring that the provisions of the Bills are all encompassing.

 

The Institute however, urged all those who have expressed concerns about certain aspects of the Bills to base their assertions on facts and figures and endeavour to make their suggestions and recommendations on specific provisions of concern for a more enriched document.