Delta North Senator, Ned Nwoko, has voiced his strong support for the four new tax reform bills currently before the National Assembly, calling them a critical opportunity to resolve Nigeria’s long-standing fiscal challenges. Speaking during an interview in Abuja on Wednesday, Nwoko, a member of the opposition Peoples Democratic Party (PDP), emphasized that Nigeria’s tax system was overdue for reform.
Nwoko, who serves on the Senate Committees on Constitutional Amendment and Finance, remarked that Nigeria’s tax-to-GDP ratio is one of the lowest in the world, which severely limits the country’s revenue generation capacity. “Nigeria, with one of the lowest tax-to-GDP ratios in the world, our revenue framework is not fit to support a population of more than 220 million people,” he stated. He argued that without significant tax reforms, the nation would continue to face fiscal difficulties that hinder development.
According to the senator, the proposed tax reforms must embrace the principle of progressive taxation. “The principle of progressive taxation is central to the success of these reforms, which is protecting small businesses and low-income earners while ensuring that those with higher incomes contribute proportionately,” Nwoko said. This approach, he believes, will ensure that tax burdens are more equitably distributed across different segments of the population.
Nwoko also highlighted that the tax reform bills present a unique opportunity to tackle Nigeria’s social safety net issues. He proposed that if the presidency adopts his model for a National Social Security Agency, the reforms could lead to a more robust and sustainable safety net for Nigerians. “Importantly, this overhaul can also provide a stronger social safety net, particularly if the presidency adopts my proposed model for a National Social Security Agency,” he added.
The senator further elaborated on his proposed model, which includes contributions from taxes and the private sector to fund the agency sustainably. However, he stressed that these reforms must be paired with strong accountability measures to ensure effective implementation. “However, for this promise to be realised, we must pair reform with strong accountability mechanisms and a commitment to effective implementation,” Nwoko explained. He emphasized that the country could no longer afford to delay these vital decisions.
In addressing concerns about the reforms, Nwoko pointed out that taxation itself was not the issue but rather how the revenue generated is utilized. “It’s not taxation that is the problem, but how the revenues are utilised for the benefit of the people,” he said, underscoring the need for more efficient and transparent management of public funds.
While there has been opposition to the proposed reforms, Nwoko noted that such concerns are not unique to Nigeria. He cited examples of other countries that have successfully implemented tax reforms, despite initial challenges. “Countries that have successfully implemented tax reforms faced initial challenges but ultimately created systems that are fairer,” he observed, suggesting that Nigeria too could overcome any initial hurdles.
On November 28, the Nigerian Senate passed the tax reform bills for second reading, which had been forwarded to it by President Bola Tinubu in October 2024. The passage followed a series of debates among lawmakers and was followed by a closed-door session. The bills were then referred to the Committee on Finance, which has been tasked with reviewing them and reporting back within six weeks.
President Tinubu has expressed his commitment to addressing concerns raised by both lawmakers and the public. In a statement released on Tuesday, the Minister of Information and National Orientation, Mohammed Idris, revealed that President Tinubu had directed the Ministry of Justice to work closely with the National Assembly to resolve any outstanding issues with the proposed bills. “In line with the established legislative procedure, the Federal Government welcomes meaningful inputs that can address whatever grey areas there may be in the bill,” said Idris.
The four bills—Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill—are part of an overhaul of Nigeria’s tax system. The government has stated that the reforms aim to consolidate existing tax laws, create clearer frameworks for tax administration, and establish new institutions like the Tax Appeal Tribunal and the Office of the Tax Ombudsman.
