NESG Backs Tax Reform Bills, Calls For Comprehensive Legislative Review
“The President’s instruction to us was clear: tax the harvest, not the seed”
The Nigeria Economic Summit Group (NESG) has thrown its weight behind the tax reform bills currently under consideration by the National Assembly, describing the proposed laws as a significant step towards fiscal equity, expanded revenue generation, and economic transparency.
Speaking during an interactive media session on Friday, the Group’s Chief Executive Officer, Tayo Aduloju, emphasised that the reforms are designed to shift the tax burden onto high-income earners and profitable enterprises, while protecting the working poor and vulnerable businesses.
On 3 October, President Bola Tinubu submitted four key tax reform bills to the National Assembly for deliberation.
The proposed legislation includes the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
While the bills have garnered significant support from various quarters, they have also faced resistance, particularly from northern Nigeria. Political, religious, and cultural leaders in the region have criticised aspects of the reforms, arguing that certain provisions disproportionately disadvantage northern states. These claims persist despite assurances from the bills’ drafters that such concerns are unfounded.
“The President’s instruction to us was clear: tax the harvest, not the seed,” Mr Aduloju stated, underscoring the NESG’s support for policies that exempt low-income earners and small businesses from additional tax burdens.
“These bills aim to allocate the tax burden fairly and build a better social security system, identifying those whose incomes already categorise them as working poor and exempting them,” he said.
Highlighting the NESG’s role part of the Presidential Committee on Fiscal and Tax Reforms, Mr Aduloju revealed that the group provided extensive analytics and modelling to evaluate the impact of the bills.
“We have simulated various scenarios, ensuring that these reforms simultaneously grow the tax net, improve tax justice, and reduce the complexity of Nigeria’s tax system,” he said.
NESG’s Head of Research and Development, Joseph Ogebe, added that initial simulations using the 2019-2020 Household Survey data demonstrated significant gains for sub-national economies.
He noted, however, that updated projections based on the Nigeria Living Standard Survey (2022-23), expected early next year, will provide more accurate insights given changing consumption patterns.
Legislative process
Despite backing the reforms, the NESG acknowledged the political sensitivities surrounding tax legislation and called for a thorough legislative review.
The group’s CEO urged lawmakers to reopen public hearings to gather input from all geopolitical zones, highlighting the importance of balancing economic imperatives with political considerations.
“This is a federation, and geopolitics matter. The legislative process must account for equity concerns, institutional capacity, and impact assessments,” he said.
He further stressed the need for transparency in tax collection, noting that the bills address long-standing issues such as unauthorised non-state tax collectors and the absence of mechanisms for VAT refunds.
Mr Aduloju described the tax reforms as a catalyst for a broader conversation on fiscal federalism, acknowledging that while the proposed laws may not resolve all fiscal inequities, they represent a necessary step forward.
“These reforms require the spirit of federalism to succeed. Lawmakers must refine the bills to ensure they work for more Nigerians,” he said.
The NESG reiterated its position that the reforms, though imperfect, are a marked improvement over existing tax policies and urged all stakeholders to engage constructively.
“If the final legislation does not protect the working poor, expand the tax net, or enhance transparency, we will not hesitate to speak out,” he said.
