Nigeria’s lower house approved four tax reform bills aimed at overhauling the tax system, but certain measures were moderated. Key changes include a proposed increase in VAT, adjustments in revenue-sharing, and a new corporate tax rate for the petroleum sector. The bills are expected to pass in the upper house next week and take effect once signed by President Tinubu.

On Thursday, Nigeria’s lower house of parliament approved four tax reform bills proposed by President Bola Tinubu, signaling a significant move towards revamping the nation’s tax framework. Despite this progress, certain propositions were diluted to accommodate varied perspectives among lawmakers. Nigeria’s tax-to-GDP ratio stands at a mere 10.8%, necessitating governmental reliance on borrowing for budgetary support.

In conclusion, the recent passage of tax reform bills in Nigeria’s lower house reflects a crucial step towards enhancing the country’s tax system. While the reforms exhibit potential for increased revenue generation, compromises made during the legislative process highlight ongoing challenges. The anticipated approval from the upper house and subsequent presidential assent are pivotal for implementation and future economic stability.

Original Source: www.marketscreener.com