ABUJA – The Nigerian Senate on Wednesday passed two of the four Tax Reform Bills submitted by President Bola Ahmed Tinubu in 2024. The bills passed include:

Nigeria Revenue Service (Establishment) Bill, 2025

Nigeria Tax Administration Bill, 2025

The decision followed a presentation by the Chairman of the Senate Committee on Finance, Senator Mohammed Sani Musa (APC – Niger East), and was endorsed after extensive deliberation.

Key Highlights:

• VAT remains at 7.5%, following amendments suggested by the Nigeria Governors’ Forum (NGF).
• The VAT sharing formula adopted:
• Federal Government – 10%
• State Governments & FCT – 55%
• Local Governments – 35%
• Breakdown of VAT Allocation:

States:

• 50% – Equality
• 20% – Population
• 30% – Place of consumption (replaces “derivation”)
• Local Governments:
• 70% – Equality
• 30% – Population

Nigeria Revenue Service Bill Adjustments:

The President is designated as Chairman of the Board, while the Executive Vice Chairman will lead the service, subject to Senate confirmation.

Six Executive Directors will represent the six geopolitical zones on a rotational basis.

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Penalties for non-compliance were reviewed:

• Failure to register: ₦100,000 in the first month; ₦50,000 monthly thereafter.
• Failure to file returns: ₦200,000 initially; ₦50,000 for each following month.
• Failure to keep records: ₦10,000 for individuals; ₦100,000 for companies.
• Failure to remit tax may attract up to 3 years of imprisonment.

Commendations & Next Steps

Senate President Godswill Akpabio praised lawmakers for staying late into the evening to deliberate and finalize the bills. He confirmed that the remaining two bills—the Joint Revenue Board (Establishment) Bill and the Nigeria Tax Bill, 2025—will be addressed on Thursday.

Deputy Senate President Barau Jibrin highlighted the Senate’s maturity in resolving initial disagreements through public hearings and consultations with religious leaders, NGOs, and the NGF.

“This is the beauty of democracy. I’m proud of the Senate for the unity and maturity shown,” Barau said.

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