Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, has outlined the transformative potential of Nigeria’s proposed value-added tax (VAT) reforms. Speaking at an interactive session with the Organised Private Sector of Nigeria (OPSN) on Friday, Oyedele highlighted the reforms’ focus on curbing inflation, supporting small and medium enterprises (SMEs), and fostering business growth.

The session addressed the urgency and potential impact of four tax reform bills submitted to the National Assembly by President Bola Tinubu on October 3. These include the Nigeria Tax Bill, the Tax Administration Bill, the Joint Revenue Board Establishment Bill, and a proposal to replace the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service.

Oyedele revealed that the reforms would raise the tax exemption threshold for SMEs from ₦25 million to ₦50 million in annual turnover, exempting small businesses from company income tax (CIT). Additionally, individuals earning up to ₦1 million annually would no longer pay personal income tax, offering relief to low-income households that spend most of their earnings on essentials like food, rent, and transportation.

“These reforms aim to support low-income households and simplify tax compliance for businesses,” Oyedele said, adding that a unified Nigeria Tax Act would streamline the taxation of income, transactions, and instruments for easier understanding.

The proposed changes also include new withholding tax regulations for 2024. Small businesses would be exempt from withholding tax obligations, while manufacturers, producers, and farmers would also benefit from exemptions. Oyedele emphasized that these measures are designed to tackle tax evasion and promote fairness in the system.

Francis Meshioye, chairman of OPSN and president of the Manufacturers Association of Nigeria (MAN), stressed the critical role of the reforms in creating a conducive business environment. He encouraged stakeholders to leverage the benefits for sustainable economic growth.

However, Segun Ajayi-Kadir, MAN’s director-general, raised concerns about multiple taxation and its impact on business investments. “Unorthodox and demeaning methods of collecting taxes by state and non-state actors have persisted, creating challenges for businesses,” he said, urging for a fair and just tax system.

Ajayi-Kadir underscored the importance of the reforms, stating, “The outcome of this initiative by President Tinubu will redefine Nigeria’s business landscape in an unprecedented way.”

The session provided a platform for stakeholders to discuss the reforms’ implications and called for swift action to address tax-related challenges hindering Nigeria’s economic growth.