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Reform Bills propose 55 per cent VAT revenue for states

Published

2 years ago

November 29, 2024

Reform Bills propose 55 per cent VAT revenue for states

More insights into the Tax Reform Bills under consideration by the National Assembly were given yesterday during a debate at the Senate.

Should the Bills be passed as proposed and signed by the President, states will get 55 per cent of the Value Added Tax (VAT).

Senate Leader Opeyemi Bamidele made this know during the debate, which proceeded the passage of the Bills through first and second reading.

In the House of Representatives, lawmakers chose to continue consultations on the Bill until the next legislative day (Tuesday).

The four Tax Reform Bills sent by the Executive are:

•A Bill for an Act to Establish the Joint Revenue Board, the Tax Appeal Tribunal and the Office of the Tax Ombudsman for the harmonisation, coordination and settlement of disputes arising from revenue administration in Nigeria and for related matters, 2024.

•A Bill for an Act to Repeal the Federal Inland Revenue Service (Establishment) Act, No.13, 2007 and enact the Nigeria Revenue Service (Establishment) Act to Establish the Nigeria Revenue Service, charged with powers of assessment, collection of, and accounting for revenue accruable to the Government of the Federation, and for related matters, 2024.

•A Bill for an Act to Provide for the assessment, collection of, and accounting for revenue accruing to the Federation, Federal, States and Local Governments; prescribe the powers and functions of tax authorities, and for related matters, 2024.

•A Bill for an Act to Repeal certain Acts on taxation and consolidate the legal frameworks relating to taxation and enact the Nigeria Tax Act to provide for taxation of income, transactions and instruments, and for related matters, 2024.”

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Bamidele, who sponsored the bills, shed light on the sharing formula, saying: “Unlike what is obtainable under the existing tax regime whereby the Federal Government takes a lion share of VAT revenues, it is proposed that the sharing formula should allow State Governments share 55% of VAT revenue from the current 15% to 10% sharing formula.”

But former Senate Chief Whip Ali Ndume, who opposed the bills, called for their withdrawal to allow for more consultations with stakeholders.

On Wednesday, when Presidential Economic Team members appeared before the Senate to explain the content of the bills, Ndume and Senator Abdul Ningi tried to stop them but the attempt was futile.

The Senate held a one-hour closed door session, where the senators agreed to debate the general principles of the bills.

Leading the debate, Bamidele said the proposals should be seen as part of the required legislative intervention to support ongoing fiscal and tax reforms needed to reposition the economy for growth and productivity.

Bamidele said: “These bills should be considered with great sense of patriotism and exercise of the powers of the National Assembly under Section 59 of the Constitution regarding imposition of taxes. I therefore, urge my colleagues to support these bills for second reading.”

Explaining the elements of the bills, the Senate Leader said they would overhaul the country’s tax system, simplify the tax landscape, reduce the burden on small business and streamline how taxes are collected.

He stressed: “In broad terms, the four bills seek to ensure uniformity in tax revenue administration in Nigeria in accordance with the provisions of the Constitution, eliminate the incidents of double taxation across the country, deploy taxation as a tool to encourage private sector investments in critical industries and boost individual disposal incomes through targeted tax exemptions as captured in the various bills.

“In the area of tax exemptions, there is a proposal to exempt those whose salaries are not more than the minimum wage from P.A.Y.E deductions while small businesses with annual turnover of N50, 000,000 or less are equally exempted from payment of taxes.

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“Similarly, there is a proposed huge reduction in company income tax from the current 30% to 25% by 2026.

“As part of deliberate attempt to curtail double taxation and multiplicity of taxes and levies, multiple taxes hitherto paid by companies under various tax heads, namely 2.5% education tax and 0.25% NASENI tax have been harmonised into a development level of 2% which by 2030, will be applied to fund the newly established student loan scheme, which will benefit many Nigerian youths.

“However, local governments’ share of VAT revenue remains unaffected. Relatedly, basic items consumed by Nigerian households such as food items, medical services and pharmaceuticals, educational fees, electricity, e.t.c., are exempted from VAT.

“Again, as part of efforts to ease the administration of income taxes and levies across the Federation, there is a reasonable effort made to consolidate core tax statutes and related tax legislations.

“Contrary to misrepresentations in the public domain regarding the intendment of the Bills under consideration, I wish to state that these Bills contains innovative people-oriented proposals as part of government’s deliberate fiscal and tax reform measures to cushion the effect of ongoing broader economic policies such as the removal of subsidy on petroleum products, renewed efforts to implement cost-reflective electricity tariffs in the power sector etc, on Nigerian citizens.”

The Chairman of Senate Committee on Finance, Sani Musa (APC – Niger East) supported the bills.

The senator representing Bayelsa West, Seriake Dickson, commended the Executive for coming up with the landmark tax reform bills.

He said the fiscal legislation would entrench fiscal federalism in Nigeria, if passed into law.

Dickson noted that Nigerians were paying taxes and the government at various levels has been using it to carry out developmental projects since the colonial era.

He said the situation changed when oil was discovered and the sub-national governments started relying on the Federation Accounts monthly allocations.

He pointed out that some stakeholders objected to the bills because there had not been proper consultation.

Dickson said: “The position of the Nigerian Governors Forum is legitimate. The Executive should carry out more enlightenment on the bills.

“The derivation is meant to encourage governors to be more productive. The proposed bills would enable states to boost revenue by creating enabling environment that could encourage investment.

“When companies are established in their states, the Pay As You Earn taxes that would be collected from workers of those companies will be paid to the state governments.

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“As a federalist, which I’ve been all my adult life, I see these bills as a move towards entrenching fiscal federalism in Nigeria, which I fully support.

“I use this opportunity to call on all my colleagues to agree that these bills, all four of them, should be passed for second reading to enable our committee, the experts and the general public participate in accordance with our rules.

Ndume, who opposed the bills, said he is against the timing of the bills, the provision for sharing tax revenue based on derivation and lack of broad-based consultation before they were presented.

Ndume’s position was countered by Senator Mohammed Tahir Monguno (APC Borno North), who said the views of stakeholders who oppose the bills should be collated at the public hearing.

He said the governors and traditional rulers are free to ventilate their opinions at the public hearing.

Monguno said Ndume’s position was not only strange to legislative process, but also a mere academic exercise’.

He said it was curious that Ndume, who was a Minority Leader in the House of Representatives, a Senate Leader, and immediate past Chief Whip of the Senate, could in spite of the cognate experience about lawmaking, come up with such arguments.

Monguno said: “I get to disagree with you that this bills should be withdrawn first and consultation should be held with the Nigerian Governors Forum and traditional rulers.

“We have a procedure, which is clearly and unambiguously stated in our rulebook for the process of lawmaking, and the Constitution, in a very clear and unambiguous manner, gave us the power to regulate our proceedings.

“Pursuant to Section 60 of the 1999 Constitution, as amended, we gave these rules to ourselves in order to guide our proceedings.

“The process of lawmaking is very clear and unambiguous as per this rule book. That after second reading, it will now be transmitted to the Committee for Public Hearing.

“In the course of the public hearing, Nigerians of all walks of life, will come, including the governors and traditional rulers. They are free to come and ventilate their opinion.”

Reform Bills propose 55 per cent VAT revenue for states

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Tantita Operations Push Oil Export Earnings to $9.39bn in Q2

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High Chief Government Oweizide Ekpemupolo, popularly known as Tompolo

Tantita Operations Push Oil Export Earnings to $9.39bn in Q2

Nigeria’s crude oil export earnings rose to $9.39 billion in the second quarter of 2026, with improved pipeline security, higher production and greater stability in the Niger Delta supporting the stronger performance.

Provisional Balance of Payments (BOP) data showed that Nigeria’s total goods exports increased to $20.08 billion in Q2, up from $15.56 billion in the first quarter.

Crude oil exports increased by 15.78 per cent to $9.39 billion, while natural gas exports climbed by 40.15 per cent to $3.63 billion.

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Among the companies involved in pipeline surveillance in the Niger Delta is Tantita Security Services Nigeria Limited (TSSNL), which was engaged by the Federal Government to protect oil pipelines and other critical petroleum infrastructure.

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Industry stakeholders have linked the improved operating environment in the Niger Delta to increased crude production and stronger export performance. However, the rise in export earnings cannot be attributed to Tantita alone, as production volumes, international oil prices, investments, operational efficiency and wider government measures also influence export receipts.

The broader export figures also showed significant improvements across other sectors of the petroleum industry.

Refined petroleum product exports increased by 66.24 per cent to $3.94 billion, while non-oil exports rose by 25.30 per cent to $3.12 billion during the quarter.

At the same time, Nigeria’s crude oil imports fell sharply from $1.39 billion in Q1 to $580 million in Q2, further strengthening the country’s external position.

The stronger export performance helped push Nigeria’s current account surplus to $7.54 billion, representing a 67.93 per cent increase from the $4.49 billion recorded in Q1. The figure was also higher than the $5.17 billion recorded in Q2 2025.

The increase in the current account surplus was driven largely by higher export earnings and an improved goods account.

The rise in crude earnings also coincided with stronger production, with Nigerian crude output reaching about 1.56 million barrels per day in June 2026, excluding condensates.

The development is significant for Nigeria, which has struggled in recent years to consistently meet its production potential because of crude oil theft, pipeline vandalism, ageing infrastructure and underinvestment in the upstream sector.

Improving security around oil-producing assets has therefore become a key part of efforts to raise output and increase foreign-exchange earnings.

Tantita, led by High Chief Government Oweizide Ekpemupolo, popularly known as Tompolo, has been at the centre of the Federal Government’s pipeline surveillance arrangement in the Niger Delta.

Stakeholders, however, say sustained growth in oil earnings will require more than surveillance operations. They have called for continued investment in exploration and field development, improved infrastructure, enhanced recovery from mature fields and faster development of major deepwater projects.

The Federal Government has also been pursuing measures aimed at attracting fresh investment into Nigeria’s upstream sector, including fiscal incentives for deepwater oil and gas projects.

For Nigeria, the latest export figures offer a boost at a time when the country is seeking stronger foreign-exchange inflows, increased oil production and greater fiscal revenues.

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Dangote Sets 40-Month Deadline for $16bn East Africa Refinery in Kenya

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Dangote Sets 40-Month Deadline for $16bn East Africa Refinery in Kenya

Nigerian industrialist Aliko Dangote has set a 40-month completion target for his planned $16 billion East Africa refinery in Lamu, Kenya, following the official groundbreaking of the project.

Dangote and Kenyan President William Ruto broke ground for the 700,000-barrel-per-day (bpd) refinery on Wednesday, September 30, 2026, with the facility designed to supply refined petroleum products to Kenya and other countries across the region.

Dangote said the refinery would be commissioned within 40 months.

“We will come back here and commission this refinery in 40 months from today,” he said at the ceremony.

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The project is expected to produce petrol, diesel, jet fuel, polypropylene and base oil, with the products targeted at Kenya and wider East African markets. Dangote has also said part of the refinery’s jet-fuel output could be supplied to Europe and the United Kingdom.

The facility will also include a planned 1,000-megawatt power plant, which Dangote said would provide electricity for the wider industrial complex.

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Beyond refining, the billionaire said the project would create an industrial ecosystem covering petrochemicals, logistics, engineering, marine services, manufacturing, technology and small and medium-sized enterprises.

Dangote also announced plans for a training school that would prepare 1,000 Kenyan engineering graduates for opportunities associated with the project. The wider development is expected to generate thousands of jobs across the refinery and related industries.

The project has attracted major international engineering and technology partners, with Honeywell Technologies providing process technologies, licensing, engineering services, catalysts, equipment and digital solutions.

The use of established designs and experience from Dangote’s Nigerian refinery is expected to shorten the development schedule compared with a typical new refinery.

Engineers India Limited is also involved in the project under a major engineering and project-management contract.

Dangote’s Kenyan project is modelled partly on the experience of his 650,000-bpd refinery in Lagos, with the new facility expected to draw on technology and engineering experience gained from the Nigerian plant.

The refinery is expected to source crude from Uganda and other African producers, while serving a market extending beyond Kenya to countries including Uganda, Rwanda, Tanzania, Ethiopia and South Sudan.

Regional leaders who attended the groundbreaking included Ugandan President Yoweri Museveni and Ethiopian Prime Minister Abiy Ahmed, alongside other African leaders and former Nigerian President Olusegun Obasanjo.

President Ruto described the project as an investment in energy security, industrialisation and regional integration, while stressing the importance of ensuring that Kenyan citizens benefit from the employment and training opportunities created by the refinery.

Dangote has also proposed allowing governments in the region to take a combined 30 per cent stake in the refinery, potentially giving participating countries an opportunity to benefit financially from the project.

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Dangote Draws Battle Lines as Fuel Import Fight Heads Back to Court

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Dangote Draws Battle Lines as Fuel Import Fight Heads Back to Court

Aliko Dangote, President of Dangote Industries Limited, has said he is prepared to face legal challenges as the dispute over fuel imports, domestic refining and import licences intensifies in Nigeria.

Dangote spoke amid renewed litigation involving the Dangote Petroleum Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over the continued importation of refined petroleum products into Nigeria.

The latest development followed a Federal High Court ruling in Abuja directing the NMDPRA to continue granting, extending or renewing fuel import licences for Matrix Energy, A.A. Rano and AYM Shafa, provided the companies meet the relevant legal and regulatory requirements.

Justice Inyang Ekwo ruled that the regulator’s handling of the companies’ applications did not comply with provisions of the Petroleum Industry Act (PIA). The court also held that the NMDPRA has a responsibility to promote competition in the midstream and downstream petroleum sectors.

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The judgment has added fresh momentum to a wider dispute over whether Nigeria should continue granting petrol import licences as domestic refining capacity expands.

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