Fiscal Responsibility Commission endorses tax reform bills as equitable, transformative

The Fiscal Responsibility Commission (FRC) has thrown its support behind the Tax Reform Bills currently under consideration by the National Assembly.

The commission believes that the tax reform bills have the potential to enhance fiscal governance and boost economic growth.

Victor Muruako, chairman of the commission, shared this during an interaction with academics and journalists at the Fellowship Lecture and Investiture Ceremony of the Capital Market Academics of Nigeria (CMAN) held on December 9, 2024, at the NDIC Academy, Abuja.

Muruako revealed that a critical analysis conducted by the FRC shows the proposed reforms do not favour any specific region or group. Instead, they promote a fairer distribution of resources among Nigeria’s federating states.

“The bills are designed to benefit all Nigerians, particularly low-income earners and Micro, Small, and Medium Businesses (MSMBs),” he stated.

The bills, developed by the Presidential Fiscal Policy and Tax Reforms Committee, include provisions to: provide Tax Relief for Low-Income Earners: Individuals earning less than N1.7 million annually will see a reduction in income tax; reduce Tax Burden on Small Businesses: Companies with turnovers below N50 million will be exempted from taxes, benefiting over 90% of small businesses; simplify the Tax System: The number of taxes and levies will be reduced, streamlining tax administration; increase Revenue for Subnational Governments: States and local governments will receive a larger share of VAT revenue, enhancing public service delivery and improve Ease of Doing Business: The reforms aim to reduce compliance burdens for businesses and make the tax system more user-friendly.

Muruako highlighted the broader economic implications of these reforms. He noted that tax relief for low-income earners could boost household savings and investments, thereby driving sustainable economic growth. Similarly, easing the tax burden on MSMBs would allow them to grow organically, contributing to a rise in Nigeria’s GDP over time.

Responding to controversies surrounding the bills, Muruako commended President Bola Ahmed Tinubu for fostering dialogue, describing him as a Democrat. He urged stakeholders from all geopolitical zones to support the reforms, emphasizing their transformative potential for Nigeria’s fiscal and economic landscape.

“The reforms are not just about increasing government revenue—they are about creating an enabling environment for businesses, reducing poverty, and ensuring equitable resource distribution,” Muruako stated.

With these reforms, the federal government aims to redefine Nigeria’s tax architecture, making it fairer, more efficient, and better aligned with the nation’s development goals.