Senate Approves Critical Tax Reforms to Boost Revenue — But Critics Warn of Hardship
On May 9, 2025, Nigeria’s Senate passed four major tax reform bills, moving to raise VAT from 7.5% to 12.5%, reallocate petroleum tax duties, and expand the Nigeria Revenue Service (NRS) .
These reforms are central to President Tinubu's strategy to diversify government revenue beyond oil and slash borrowing needs. Nigeria currently has a **low tax-to-GDP ratio of just 10.8%** .
🔍 What You Should Know
VAT Rise: Starting next fiscal year, VAT will increase by 5 points—a move that may hit consumers hard amid current inflation.
Fiscal Duty Shift: Oil royalties and petroleum profit taxes will now be collected by the proposed NRS, aiming to tighten revenue compliance .
Internal APC Rift: Some APC governors and lawmakers voiced strong opposition, citing fears of worsening economic hardship .
⚠️ Why It Matters
Economic Impact: Higher VAT may burden households and businesses struggling with inflation.
Fiscal Transparency: Creation of an empowered revenue service offers hope for better accountability and less leak.
Political Stakes: The reforms could reshape Nigeria's fiscal framework—if passed into law by Tinubu.
🛑 Call-to-Action
📢 Monitor the Bill: Encourage your lawmakers to push for equitable provisions—such as VAT exemptions on essentials.
🏛️ Advocate for Transparency: Demand that the NRS remain independent, with oversight and public access to revenue data.
🗣️ Share this story using #TaxJusticeNG to amplify citizen voice during the reconciliation stage before presidential assent.
Adedayo Obadina
Talksocialtalks
