The Civil Society Legislative Advocacy Centre (CISLAC) has urged the National Assembly and the Executive to critically examine and address key gaps in the National Tax Bill, 2024 to ensure that its implementation fosters inclusivity, economic equity and sustainable governance.
CISLAC has been at the forefront of advocating for fiscal policy reforms that address Nigeria’s socio-economic challenges while promoting transparency and inclusiveness.
In a statement signed by the Executive Director of CISLAC, Auwal Musa Rafsanjani, noted that the Nigeria Tax Bill, 2024, “a landmark legislative initiative, holds the potential to transform the country’s fiscal framework by consolidating legal provisions, enhancing tax administration, and promoting economic transparency.
CISLAC had identified several critical areas of concern in the bill that require immediate attention.
He said: “The proposed derivation model for VAT revenue distribution risks deepening economic disparities among states. Addressing such systemic inequities requires a constitutional review.
“To mitigate these challenges, CISLAC advocates for the establishment of an Equalization Fund to support less-developed states in building their human capital and institutional capacity until 2030.
“Additionally, VAT must be collected at the point of sale rather than remitted to corporate headquarters to enhance transparency and prevent regional disparities in revenue allocation.”
He added that the proposed increase in VAT rates, which are set to double by 2030, raises significant concerns about its impact on inflation and poverty.
Rafsajani recommended maintaining the current VAT rate of 7.5 per cent until the economy stabilizes, coupled with measures to shield vulnerable populations from price shocks.
He stressed that it was imperative that the list of VAT exemptions be expanded to include essential items such as cooking energy (LPG and kerosene) and electricity for consumer use, to mitigate the regressive effects of taxation on low-income households.
Rafsajani added: “To ensure tax incentives are administered equitably, CISLAC emphasizes the need for transparency in their implementation,” the statement continued.
“Strengthening the enabling laws of the Nigerian Investment Promotion Commission (NIPC) is critical to preventing misuse and ensuring inclusivity.
“Furthermore, the bill’s provisions for an effective tax rate on multinationals and high-turnover companies must be backed by clear and enforceable guidelines. Strengthening compliance mechanisms will ensure that large corporations and multinational enterprises contribute their fair share to national revenue. “