The Nigerian Senate has passed two out of four Tax Reform Bills submitted by President Bola Ahmed Tinubu, following extensive consultations and revisions to address public concerns.
The bills passed are the Nigeria Revenue Service (Establishment) Bill, 2025, and the Nigeria Tax Administration Bill, 2025. Both aim to strengthen the country’s tax system by establishing a robust legal and institutional framework for tax collection and administration.
Senator Mohammed Sani Musa (APC – Niger East), Chairman of the Senate Committee on Finance, presented the report during Wednesday’s plenary.
The other two bills — the Joint Revenue Board (Establishment) Bill, 2025, and the Nigeria Tax Bill, 2025 were deferred for further consideration.
The Senate adopted key amendments, including:
- Retention of VAT at 7.5%
- Revised VAT revenue sharing formula:
- Federal Government – 10%
- State Governments and FCT – 55%
- Local Governments – 35%
The VAT for states and local governments will be distributed as follows:
- States: 50% equality, 20% population, 30% place of consumption
- LGAs: 70% equality, 30% population
The bills also impose stricter penalties for tax-related offences:
- Failure to register: ₦100,000 in the first month; ₦50,000 for each additional month
- Failure to file returns: ₦200,000 in the first month; ₦50,000 for each additional month
- Failure to keep records: ₦10,000 for individuals; ₦100,000 for companies
- Failure to remit tax: Up to 3 years’ imprisonment in addition to administrative penalties
Under the new structure, the President will serve as Chairman of the Nigeria Revenue Service Board, while an Executive Vice Chairman, subject to Senate confirmation, will head the agency.
Six Executive Directors will be appointed to ensure geopolitical balance.
Senate President Godswill Akpabio praised his colleagues for their dedication, noting that the bills reflect months of public engagement and input from the Nigeria Governors’ Forum and other stakeholders.
Deputy Senate President Barau Jibrin lauded the collaborative approach, describing the process as a model of democratic maturity and national consensus.
