The House of Representatives Committee on Finance has put forward significant amendments to the tax reform bills that were submitted to the National Assembly by President Bola Ahmed Tinubu.
The committee has revised several clauses, removed some entirely, retained a number, and added new provisions to the bills.
Naija News reports that the chairman of the House Committee on Finance, Rep James Abiodun Faleke, presented the consolidated tax reform bills to the House during the resumption of plenary yesterday.
In October 2024, President Tinubu had forwarded four tax reform bills to the National Assembly for their review and approval.
The presentation of these reports came after a three-day public hearing on the bills, during which the committee reviewed the memoranda submitted and considered the feedback from various stakeholders.
The reports submitted to the House include one concerning a “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)” (Referred: 12/2/2025).
“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 (HB.1758) and 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 (HB.1759).”
Barring any last-minute change, the House of Representatives will begin the clause-to-clause consideration of the bills on Thursday.
VAT Increase, Inheritance Tax
According to Daily Trust, the committee has put forth several recommendations for amendments to the proposed bills, advising the House to undertake a clause-by-clause review and subsequent approval.
Naija News understands that these amendments specifically addressed several contentious issues, including the proposed increase in the VAT rate, the elimination of Tertiary Education Trust Fund (TETFUND), National Information Technology Development Agency (NITDA), and National Agency for Science and Engineering Infrastructure (NASENI), as well as adjustments to the inheritance tax and the VAT derivation and distribution formula, among other matters.
In section 146, the initial proposal suggested raising the VAT from the current rate of 7.5% to 10% by December 31, 2025, followed by increments to 12.5% from January 2026 until December 31, 2029, and ultimately to 15% from January 2030 onward. However, the committee has recommended maintaining the existing VAT rate of 7.5%.
Additionally, the committee revised the clause concerning inheritance tax. The original proposal indicated that estates left by deceased individuals would be subject to taxation.
This has now been amended to state that only those who inherit an estate or a portion thereof and subsequently invest it in a business that generates returns will be liable for taxation.
TETFUND, NITDA, NASENI Funding Continues
The committee has also revised Section 59 of the Nigerian Tax Bill, which initially aimed to cease funding for TETFUND, NITDA, and NASENI by 2030.
The new proposal ensures that funding will continue for these entities while also suggesting additional agencies to receive support from the 4% development levy fund.
According to the committee’s recommendations, the distribution of funds generated from the 4% development levies on the assessable profits of all companies will be allocated as follows: (a) Tertiary Education Trust Fund – 50%; (b) Nigerian Education Loan – 3%; (c) National Information Technology Development Fund – 5%; (d) National Agency for Science and Engineering Infrastructure – 10%.
Additional allocations include the Social Security Fund – 10%; Defence Infrastructure Fund – 10%; Nigeria Police Trust Fund – 5%; National Sports Development Fund – 3%; National Board for Technological Incubation – 3%; and National Cybersecurity Fund – 1%.
Furthermore, the committee has advised that each beneficiary agency and fund listed in subsection (3) must prepare and submit their income and expenditure reports to the National Assembly for appropriation purposes.
In relation to Section 22 of the bill, which stated that “a taxable person shall, in respect of Value Added Tax (VAT), with or without a notice and whether or not an economic activity has taken place, submit a return to the Service in the prescribed form, by the date specified in subsection of this section or in a regulation issued by the Service for that purpose,” the committee has recommended a modification. It now stipulates that a taxable person must submit their VAT return in the prescribed form on or before the 21st day of the month following the reporting period, regardless of whether an economic activity has occurred.
Attribution Irrespective Of Location
The Section 22 (12) initially suggested that “For the purpose of attribution, any return under this section shall provide details of derivation of taxable supplies by location in a manner prescribed by the Service.”
However, the committee proposed an alternative, stating that “For the purpose of attribution, any return under this section shall provide details of consumption of taxable supplies, regardless of the location where the return is submitted.”
Section 7(2) of the Nigerian Tax Administration Bill proposed that “Where a relevant tax authority refuses to register or issue a Tax ID upon request under subsection (1) of this section, the relevant tax authority shall, within two working days of the decision, notify that person of the refusal. However, the committee recommended that where a relevant tax authority refuses to register or issue a Tax ID upon request under subsection (1) of this section, the relevant tax authority shall, within five working days of the decision, notify that person of the refusal with reasons.”
Modification of EFS Usage
The proposed Section 23 of the bill indicated that when the Service implements an Electronic Fiscal System (EFS), all individuals making taxable supplies must utilize the EFS for the accurate recording and reporting of these supplies. Additionally, it suggested that the Service could establish technical specifications and security standards for the effective use of the EFS. Furthermore, it emphasized that taxable individuals are accountable for keeping precise records of all transactions processed through the EFS.
In response, the committee advised that the Service should determine the fiscalisation system to be adopted and outline a transition plan for its implementation.
The committee reiterated that, “When the Service deploys an Electronic Fiscal System (EFS), any individual making a taxable supply must employ the EFS for recording and reporting purposes.”
Moreover, it stated that “Taxable individuals are responsible for maintaining accurate records of all transactions conducted through the EFS, and the Service should define the fiscalisation system to be implemented along with a transition plan for its execution.”
Section 27 suggested that, “Any individual required to deduct and remit tax under this Act or any other tax legislation must submit monthly returns as outlined in the relevant regulations.
“Any individual obligated to deduct and remit tax under this Act or any other tax legislation is required to submit monthly returns to the appropriate tax authority, as specified in the relevant regulations.”
Company Tax Rates
Section 56 of the Nigerian Tax Bill proposed that “Companies shall be levied, for each year of assessment in respect of total profits of every company, in the case of— (a) a small company, at zero per cent; and (b) any other company, at the rate of– (i) 27.5% in 2025 year of assessment, and (ii) 25% from 2026 year of assessment.”
However, the committee recommended that tax shall be levied, for each year of assessment in respect of total profits of every company, in the case of— (a) a small company, at zero percent; and (b) any other company, save for companies in subsection (2) of this section, at the rate of 30 per cent. It further recommended that companies operating in priority sectors as contained in the Eleventh Schedule of this Act shall be subject to income tax at the rate of 25 per cent, during the priority period.
Lawmaker’s Remark On Modifications Of Tax Reform Bills
A member of the House of Representatives, Bappah Aliyu Misau (Peoples Democratic Party – PDP, Bauchi), while remarking on the Reps Committee submission, observed that the contentious issues have been addressed.
He noticed that over 90 per cent of the concerns raised had been addressed.
“I had the privilege to be at the public hearing in order to feel the pulse of the nation as regards the bills. So, what I read first when I saw the report were the contentious and controversial issues. That was the first thing I did to see how the diverse opinions and suggestions by Nigerians as groups and individuals have been considered.
“The issue of VAT increase has been addressed; the issue of TETFUND, NITDA and NASENI scrapping has been removed. The proposed VAT increase from 7.5 per cent to 10 per cent and subsequently to a higher percentage has been removed.
“Inheritance Tax was the most critical aspect in the Tax reform bills which affects all Muslims. The issue has been addressed squarely. Initially, it was proposed that the estate left by a deceased would be taxed. That aspect has been removed. What is now contained in bill is that whoever inherits the estate or part of it as an heir and invests it in business, the business or the property yielding returns to him will be taxed.
“The other issue we raised about the Southern part getting more share of the VAT has also been addressed. Now we have 30 per cent derivation rather than 60 per cent. The derivation is also not as it was before; it will be based on consumption, not based on where a company or entity is headquartered,” the Lawmaker told Daily Trust.
“So, it is 30 per cent on consumption. And again, we said, this 30 per cent because of fiscalisation. What needs to be done now is to provide the technology that can track the consumption and provide the needed data for computation.
“The other issue addressed is the composition of the board of the proposed Joint Tax Board. After the chairman, it was now agreed in the bill that persons will be appointed to the board from all the 36 states and six executive directors will be appointed with one each representing each of the political zones.
“So, the executive directors will serve as heads of operations. Before, the provision was to have only non-executive directors who almost have no power, but will act on what the chairman directs them to do. What is in the bill now is that the zones will bring one person each and the president will be the one to appoint the executive directors for a tenure of four years. So, all the grey areas have been taken care of.
“The excessive powers given in the initial bill have been toned down with the proposed appointment of one person from the 36 states as members and the appointment of the executive directors from the zones.
“So, the fear of the chairman wielding excessive powers has been allayed and addressed,” he added.
