By Mercy Adi
The House of Representatives on Thursday approved significant amendments to the four tax reform bills sent to the National Assembly by President Bola Tinubu in October.
The bills, which include the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill, underwent a thorough consideration as presented by Chairman, Committee on Finance, James Abiodun Faleke. After which several amendments were approved.
The Four Bills for which amendments were proposed include: “Bill for an Act to Provide for the Assessment, Collection of, and Accounting for Revenue Accruing to the Federation, Federal, States and Local Governments; Prescribe the Powers and Functions of Tax Authorities, and for Related Matters (HB.1756) ” (Referred: 12/2/2025).
“A Bill for an Act to Repeal the Federal Inland Revenue Service (Establishment) Act, No.13, 2007 and Enact the Nigeria Revenue Service (Establishment) Bill to Establish Nigeria Revenue Service, charged with Powers of Assessment, Collection of, and Accounting for Revenue Accruable to the Government of the Federation and for Related Matters (HB.1757)”.
“A Bill for an Act to Establish Joint Revenue Board, the Tax Appeal Tribunal and the Office of the Tax Ombud, for the Harmonisation, Coordination and Settlement of Disputes arising from Revenue Administration in Nigeria and for Related Matters.
“A Bill for an Act to Repeal Certain Acts on Taxation and Consolidate the Legal Frameworks Relating to Taxation and Enact the Nigeria Tax Act to Provide For Taxation of Income, Transactions and Instruments, and for Related Matters.”
The amendments address contentious issues such as inheritance tax, Value Added Tax (VAT) rate and distribution formula, and the clause on continuous funding of TETFUND, NASENI, and NITDA from the development levies fund. One of the key amendments is the adoption of a VAT distribution formula based on 50% equality, 20% population, and 30% consumption, as proposed by the Nigerian Governors’ Forum (NGF).
Section 77 of the Nigeria Tax Administration Bill outlines the distribution of net revenue from VAT, with 10% going to the Federal Government, 55% to State Governments and the Federal Capital Territory, and 35% to Local Governments. The VAT revenue will be distributed among states and local governments based on equality (50%), population (20%), and consumption (30%).
The House also rejected the proposal for an incremental review of VAT rates, opting to maintain the current 7.5% VAT rate. This decision was made after a public hearing where a proposed increase in VAT from 7.5% to 15% by 2030 was met with opposition.
Another significant amendment was the removal of the word “ecclesiastical” from one of the clauses, replacing it with “religious.” The House also adopted the clause on continuous funding of TETFUND, NASENI, and NITDA from the development levies fund.
Lawmakers imposed stiff penalties for individuals or corporate entities found guilty of attempting to bribe or unduly influence tax officials, including a two million naira fine and a maximum three-year jail term.
The President’s and Governors’ powers to grant tax waivers were also restricted, requiring approval from the National Assembly or State Houses of Assembly. The Accountant-General of the Federation must now seek legislative approval before deducting unremitted revenue from government agencies.
Concerns regarding the potential reintroduction of inheritance tax were addressed, with provisions removed and clarified that income from inherited assets before distribution will not be taxed.
Section 4 of the Nigeria Tax Bill, 2025, was amended to exclude income on inherited assets before distribution from taxation.
The House also approved the exemption of military salaries from income tax, acknowledging the sacrifices of military personnel.
The house also approved the recommendation that agencies such as TETFUND, NITDA, and NASENI continue to receive funding, extending the benefits of the four per cent development levy fund to additional agencies.
The amendments reflect a nuanced approach to tax reform, balancing revenue generation with economic stability and fairness. The House’s decisions demonstrate a commitment to listening to public concerns and addressing contentious issues.
The approved amendments will now be sent to the Senate for concurrence. Once passed, the bills will be transmitted to President Tinubu for assent.