The Abuja Chamber of Commerce and Industry (ACCI) has lauded President Bola Tinubu’s signing into law of four pivotal tax reform bills, marking a significant stride towards a more conducive business environment in Nigeria. These legislative changes represent a bold and strategic move by the government to tackle longstanding issues within the Nigerian tax system, ultimately aiming to foster economic growth, attract foreign investment, and create a more equitable and transparent tax regime. The ACCI has consistently advocated for policies that stimulate entrepreneurship and drive sustainable development, and these reforms align perfectly with that vision. The Chamber believes these changes will play a crucial role in simplifying tax administration, reducing the burden of multiple taxation, and encouraging greater compliance. This landmark decision is expected to significantly impact the Nigerian economy, creating a more predictable and investor-friendly landscape.
The suite of new tax laws, encompassing the Nigeria Tax Bill (Ease of Doing Business), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, represents a comprehensive overhaul of the existing tax framework. The primary objectives of these reforms are to harmonize the tax system, streamline administrative processes, eliminate the complexities and inefficiencies of multiple taxation, and foster a culture of improved tax compliance. The ACCI has long championed policies that promote entrepreneurship, attract investment, and drive sustainable economic development, and these reforms represent a significant step towards achieving these goals. By creating a more efficient and transparent tax system, the government is creating a more stable and predictable environment for businesses to operate in, thereby encouraging both domestic and foreign investment.
One of the most significant aspects of these reforms is the increased exemption threshold for small businesses regarding Company Income Tax (CIT). The revised threshold, now set at N50 million in annual turnover, up from the previous N25 million, is a clear demonstration of the government’s commitment to supporting and empowering small and medium-sized enterprises (SMEs). This change will allow a greater number of small businesses to operate without the burden of CIT, freeing up resources for investment and growth. The ACCI views this as a vital measure to strengthen the backbone of the Nigerian economy, recognizing the crucial role SMEs play in job creation and economic development. This relief will enable them to reinvest their earnings, expand their operations, and contribute more significantly to the national economy.
Alongside the CIT exemption for smaller businesses, the reforms also include a planned reduction in corporate tax rates for larger companies. This move is designed to enhance Nigeria’s competitiveness in attracting foreign investment and stimulate growth within established businesses. By lowering the tax burden on larger companies, the government aims to encourage reinvestment and expansion, leading to increased economic activity and job creation. Furthermore, the retention of the Value Added Tax (VAT) at 7.5 percent, along with exemptions for essential goods and services, demonstrates a balanced approach to tax reform, ensuring that the burden on consumers is minimized while maintaining a stable revenue stream for the government.
While the ACCI largely applauds these reforms, it also raises some concerns regarding specific provisions affecting professional service providers. The Chamber has called for greater clarity and equitable enforcement of these provisions to avoid unintended consequences. It emphasizes the importance of ensuring that the implementation of these reforms is carried out in a fair and transparent manner, minimizing the burden on service providers while maintaining the integrity of the tax system. This constructive feedback underscores the ACCI’s commitment to engaging in productive dialogue with the government to ensure the successful implementation of these reforms.
The ACCI urges President Tinubu and all relevant stakeholders to demonstrate unwavering commitment and courage in executing these transformative changes, ensuring the reforms achieve their intended objectives. The Chamber pledges its continued support to the federal government through constructive policy dialogue and technical assistance. As a prominent voice of the private sector, the ACCI remains dedicated to advocating for policies that foster business growth, encourage formalization, and create a level playing field for all businesses, particularly SMEs, which are the bedrock of Nigeria’s economy. The Chamber’s sustained engagement with the government highlights its crucial role in shaping economic policy and promoting a thriving private sector in Nigeria.
