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Reform Bills propose 55 per cent VAT revenue for states

Published

1 year 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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Otedola Dumps Geregu Stake, Invests $100 Million In Dangote Refinery

Published

11 hours ago

May 21, 2026

Trends Admin

Aliko Dangote, Femi Otedola

Otedola Dumps Geregu Stake, Invests $100 Million In Dangote Refinery

LAGOS — Chairman of First HoldCo, Femi Otedola, has announced plans to invest $100 million in the Dangote Petroleum Refinery, revealing that he sold his stake in Geregu Power Plc specifically to fund the acquisition ahead of the refinery’s planned Initial Public Offering (IPO) scheduled for September 2026.

Otedola made the disclosure on Wednesday after leading top executives of First HoldCo on a tour of the Dangote refinery and fertiliser complex located within the Lekki Free Trade Zone in Lagos. The delegation also visited major project sites, including the refinery’s jetty facility built to receive large vessels.

“On a personal note, I’ve appealed to him; I’ve been here with him 25 times. So, my compensation is that he’s going to allocate to me shares worth $100 million in the private placement,” Otedola said.

“That’s one of the reasons why I sold my stake in Geregu Plant — to invest my proceeds in the IPO of Dangote Refinery.”

Otedola’s planned investment comes amid massive investor interest in the refinery ahead of its public listing.

President of the Dangote Group, Aliko Dangote, disclosed that the company is targeting a private placement of approximately $2 billion and has already received requests from investors exceeding that figure.

“Right now, when we say we are going to do private placement, already we have people who have actually requested to buy, and we have requests of almost $2 billion,” Dangote told journalists.

“We are not selling after that, but we’ll see what we can allocate to them.”

According to Dangote, the private placement is part of the refinery’s broader IPO programme expected later this year.

Dangote confirmed that the refinery is expected to go public by September 2026.

“We are trying to make sure that by September, we’ll be out there in the market to sell the IPO,” he said.

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He explained that the IPO is primarily designed to encourage retail participation and allow ordinary Nigerians to own shares in one of Africa’s biggest industrial projects.

“The IPO is mainly retail because our target really is to get the larger part of society to buy. We want ordinary people to benefit from the upside,” Dangote stated.

The upcoming listing is expected to become the largest IPO in African history.

Bloomberg reported on May 12 that the Dangote Group is targeting a valuation of up to $50 billion for the refinery business ahead of the IPO.

In 2025, Dangote hinted that the company could sell up to a 10 percent stake in the refinery, which Bloomberg estimated could raise about $5 billion.

For comparison, the MTN Nigeria listing in 2019 — which raised approximately $876 million — remains the largest IPO previously recorded on the Nigerian Exchange.

The Dangote Refinery IPO is projected to be five to six times larger.

Dangote also disclosed plans for a cross-border listing to attract both domestic and international investors.

The initiative is aimed at enabling Africans across the continent to participate in financing Africa’s industrialisation.

The move has already attracted interest from major African institutional investors, including representatives from South Africa’s Public Investment Corporation and the Government Employees Pension Fund — Africa’s largest pension fund — who recently toured the refinery complex.

According to FirstCap’s Chief Executive Officer, the Dangote Group has appointed several advisory firms to oversee the IPO process, including Stanbic IBTC Capital Ltd., Vetiva Advisory Services Ltd., and FirstCap Ltd.

The IPO prospectus was reportedly submitted to the Securities and Exchange Commission (SEC) in April 2026 for regulatory review and approval.

Located in the Lekki Free Zone, Lagos, the Dangote Petroleum Refinery currently has a refining capacity of 650,000 barrels per day, making it Africa’s largest single-train refinery.

The facility commenced large-scale production of diesel, aviation fuel, and petrol in 2024 after years of construction and investments estimated at about $20 billion.

Dangote noted that the refinery would account for approximately 10 percent of the refining capacity of the entire United States.

“It is going to be the largest refinery ever on earth. It is not a small business,” he said.

Beyond the investment announcement, Otedola praised Dangote for what he described as his transformational impact on Nigeria and Africa’s economy.

“I have no doubt in my mind. I’ve seen what he has done in Africa. I’ve been to six countries to commission his cement plants. Very remarkable,” Otedola said.

He described Dangote as “a colossus, a genius, probably one of the greatest men that has come out of Africa, for delivering us out of economic slavery in Nigeria and by extension Africa.”

Otedola also said the visit formed part of First HoldCo’s leadership retreat as the bank pursues its ambition of becoming one of the largest financial institutions in Sub-Saharan Africa within the next five years.

One of the most notable aspects of the planned IPO is the proposed dividend structure.

Under the proposal, investors would purchase shares in Nigerian naira, while dividends would be paid in United States dollars.

The arrangement is expected to be backed by the refinery’s projected $6.4 billion annual petrochemical export revenue, which would provide the foreign exchange needed to support dollar-denominated dividend payments.

However, the structure still requires final approval from the SEC and the Central Bank of Nigeria (CBN).

The IPO has also been structured to attract Nigerian pension funds.

As of the end of 2025, Nigeria’s pension assets under management stood at approximately N22 trillion.

Analysts believe even a modest allocation from pension fund managers could significantly support what is projected to become the largest public offering in Nigeria’s history.

While the official IPO date is yet to be formally announced, Dangote said the company would continue working with advisers to finalise valuation details, complete the private placement process, and conclude all regulatory filings ahead of the September 2026 target.

The private placement — which includes Otedola’s $100 million investment — will allocate shares to select institutional and high-net-worth investors before the public offer opens to retail investors.

Dangote added that not all interested investors may receive allocations due to the overwhelming demand already approaching $2 billion.

For Otedola, the investment signals a strategic shift from power generation into refining and petrochemicals, reflecting growing confidence among Nigerian investors in large-scale industrial projects seen as central to Africa’s economic transformation.

Otedola Dumps Geregu Stake, Invests $100 Million In Dangote Refinery

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Forland, TSS Motors strengthen technical capacity with specialised truck training

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1 day ago

May 20, 2026

Trends Admin

An instructor taking the TSS Motors technical team through a practical session with a Forland light truck

Forland, TSS Motors strengthen technical capacity with specialised truck training

Forland Motors, one of the world’s leading manufacturers of light commercial trucks, has strengthened its partnership with local assembler and distributor, Transit Support Services Ltd (TSS), through a specialised three-day technical training programme aimed at boosting the competence of technicians handling the brand’s vehicles in Nigeria.

The programme was organised to equip the TSS technical team, comprising assembly and after-sales technicians, with in-depth knowledge of Forland light trucks, which are assembled and distributed in Nigeria by the company. The training covered assembly, installation, troubleshooting, and maintenance, with the goal of ensuring high service standards in both vehicle assembly and after-sales support.

The training, held at the TSS Motors Training Centre on Ikorodu Road in the Anthony area of Lagos, was facilitated by Forland instructors who arrived from China, alongside TSS technical personnel drawn from Lagos, Enugu, and Abuja.

Also in attendance were technical personnel from Yuchai, the major supplier of engines to Forland trucks. Yuchai is one of China’s largest manufacturers of powertrain solutions.

Forland training at TSS office in Lagos

Providing further insight into the programme, the Head of After-Sales Services at TSS, Mrs. Phebian Iwalokun, said the training focused on general maintenance, engine servicing, and preventive maintenance programmes.

According to her, the initiative was designed to ensure that TSS technicians are fully equipped to manage the growing number of Forland vehicles operating in Nigeria.

She added that continuous skill enhancement had become necessary as TSS prepares for an expansion in production capacity amid increasing demand for Forland trucks across the country.

“Forland trucks are currently gaining ground in Nigeria, with over 1,000 units already in operation, mainly among fast-moving consumer goods companies, logistics firms, and last-mile distribution operators,” Iwalokun stated.

A subsidiary of ABC Transport Plc, Transit Support Services assembles Forland trucks at its plant in Enugu and provides technical and after-sales support to customers nationwide.

Forland has continued to build a strong reputation globally as a successful commercial vehicle and light-truck brand, with its products performing strongly in several international markets.

ABC Transport Group founder, Mr. Frank Nneji (right), presented certificates to the participants

Business

Rising Inflation Forces CBN to Hold Interest Rate at 26.5%

Published

1 day ago

May 20, 2026

Trends Admin

Rising Inflation Forces CBN to Hold Interest Rate at 26.5%

The Central Bank of Nigeria has retained the country’s benchmark interest rate at 26.5 per cent as monetary authorities move cautiously in response to renewed inflationary pressure in the economy.

Governor of the apex bank, Olayemi Cardoso, announced the decision on Wednesday at the end of the 305th meeting of the Monetary Policy Committee held in Abuja.

“The Committee’s decision is as follows: retain the Monetary Policy Rate at 26.5 per cent,” Cardoso stated.

The decision signals a pause in the Central Bank’s easing cycle after the MPC approved a 50-basis-point reduction in February 2026, the first rate cut after months of aggressive monetary tightening aimed at taming inflation and stabilising the foreign exchange market.

Analysts said the MPC’s latest stance reflects concerns over the recent uptick in inflation, despite earlier signs of moderation in consumer prices.

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According to the latest Consumer Price Index report released by the National Bureau of Statistics, Nigeria’s headline inflation rate rose to 15.69 per cent in April 2026 from 15.38 per cent recorded in March, representing a 0.31 percentage-point increase.

The increase has raised concerns among policymakers over persistent price pressures driven by food costs, energy prices, transportation expenses and exchange rate volatility.

The Monetary Policy Rate serves as the benchmark for lending rates across the banking sector and plays a critical role in determining borrowing costs for businesses and consumers.

Since assuming office, Cardoso and the current MPC have maintained a tight monetary policy stance to rein in inflation, attract foreign portfolio inflows and restore investor confidence in the Nigerian economy following sweeping foreign exchange reforms and broader macroeconomic adjustments by the Federal Government.

Economic experts believe the decision to retain the rate reflects the CBN’s attempt to balance inflation control with the need to support economic growth and private sector investment.

The committee’s decision is also expected to influence yields in the fixed-income market, banking sector lending rates and overall investor sentiment in the coming months.