The Arewa Consultative Forum (ACF) has called for the retention of the 7.5% Value Added Tax (VAT) rate in Nigeria’s proposed Tax Reforms Bills, stressing that this rate aligns with the current economic realities faced by businesses and citizens.
The recommendation was part of a comprehensive submission to the National Assembly regarding the Executive Tax Reforms Bills, which aim to overhaul the country’s tax system.
In a report signed by National Publicity Secretary, Tukur Muhammad-Baba, the ACF highlighted the need for improving VAT collection efficiency and expanding the tax base.
The forum specifically advocated for the formalization of Nigeria’s informal sectors through the use of digital technologies, as well as encouraging private sector investments to broaden the tax base.
The ACF’s submission also called for targeted adjustments to agricultural taxation, recommending the removal of VAT on agricultural equipment to support the farming industry. Additionally, the forum proposed revising Chapter 6 of the Tax Administration Bill by replacing the terms “supply” and “supplies” with “consumption” to better reflect the tax’s focus.
One of the key points raised by the ACF is the need for a clear definition of “derivation” in the bill. The forum suggested that the distribution of revenue derived from it should be based on consensus among states, local governments, and the Revenue Mobilisation and Fiscal Commission (RMFC).
In its critique of the proposed leadership structure in the reforms, the ACF argued that the powers granted to the Chief Executive Officer and Chairman of the Joint Revenue Board were overly concentrated in one individual.
To address this, the forum recommended reducing the CEO’s powers and replacing the eight proposed coordinating directors with six executive directors, each representing one of Nigeria’s six geopolitical zones. These directors would be nominated by the president and confirmed by the Senate.
Further advocating for continued support of educational and technological development, the ACF proposed the retention of the Tertiary Education Trust Fund (TETFUND) and the National Information Technology Development Agency (NITDA) in the tax framework. It suggested that Section 69 of the Nigeria Tax Bill be reworded to establish a “Development Levy” to be shared among TETFUND, NITDA, NASENI, and the Education Loan Fund.
The forum also emphasized the importance of public participation, urging all stakeholders to engage in the National Assembly’s public hearings, stressing that contributions from all sectors are vital for creating laws that truly serve the nation’s interests.
