A renowned audit and tax professional, and the immediate past Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami, has expressed his strong support for the ongoing tax reform bills, emphasising that they are aimed at addressing the challenges of multiple taxation faced by taxpayers.
The tax reform bills, which were presented to the National Assembly by President Ahmed Tinubu and have successfully passed their second reading, have sparked considerable debate. Central to the controversy is the proposed increase in the Value Added Tax (VAT) rates, which has raised concerns among citizens and businesses alike.
The reform package consists of four separate bills, designed to overhaul Nigeria’s outdated tax framework, boost revenue generation, and enhance compliance. However, critics argue that the proposed VAT hike will exacerbate the economic difficulties faced by low-income households.
Speaking as the keynote speaker at the Top Ten Magazine Award in Abuja, Nami stated, “I think the most important thing is for the tax system to be fair, equitable, and transparent. The priorities of these tax reforms are centred on creating a transformed tax system that works for Nigeria—a system that enables tax authorities, whether at the local, state, or federal level, to generate more revenue without adversely impacting businesses in the country.”
Focusing on the ease of doing business, Nami explained, “From the three tiers of government, there are multiple taxes, so the first thing the reform will address is reducing the number of tax payments that taxpayers are required to make. If this is achieved, it will provide an opportunity for additional investment in the economy, whether from local or foreign investors.”
He added, “Another critical aspect I want Nigerians to understand is that, aside from the ease of doing business, there will be a significant deployment of technology as part of this reform. With technology in place, many of the issues relating to corruption and the inability to generate more revenue will be addressed.”
According to Nami, the integration of technology will help bring more people into the tax net, enabling tax collectors to maximise revenue from both new and existing taxpayers.
“These are some of the key objectives of the tax administration bills,” he said. “The controversy has primarily revolved around the sharing formula. The governors have provided their input, and the proposal is now with the National Assembly, where the tax and fiscal committee is discussing the appropriate derivation formula. The Governors’ Forum has presented a counterproposal.
“This is because, whether at the local, state, or federal level, the majority of taxes go to the state, and they are seeking a fairer sharing arrangement. However, I believe the controversy has largely subsided.
“The bottom line is for the National Assembly to continue consultations to ensure the speedy passage of the bill, bringing our tax system in line with international best practices, so that the country can move forward. This will prevent us from constantly relying on the IMF or World Bank for assistance or borrowing money to pay salaries and build infrastructure when necessary.”
Nami concluded by emphasising, “Most importantly, once we are able to generate our own revenue, we will truly become the sovereign nation that we are not currently.”
