The Senate approves 2 tax reform invoices, executive vice -president of Capo del Nigeria Revenue Service

On Wednesday, the Senate approved two of the four tax reform invoices forwarded by consideration together with the Chamber of Representatives by President Bola Tinubu in October last year.

The red chamber in the passage of the bill on the creation of Nigeria Revenue Service, proposed to replace the Federal Inland Revenue Service (FIRS), recommended the appointment of an executive vice -president to direct the Revenue Agency administratively while its Council, will be led by a non -executive president.

It also replaces the derivation with the place of consumption in sharing the value added tax (VAT) by the federal government just as it approved the new formula of sharing for VAT by proposing 10%, for FG, 55%, for states and 35%for the advice of the local government.

Recall that the four tax reform invoices forwarded to both chambers of the National Assembly by President Tinubu in October last year to quickly evaluate are the law of the joint revenue committee (factory), 2025, the bill of the Nigeria Revenue Service (Establishment), 2025, the invoice of the tax administration of Nigeria and the tax law of Nigeria.

But among the four, only the bill to repeal the Federal Inland Revenue Service Act and issue the bill of Nigeria Revenue Service (ESTABLISHMP), 2025 and the bill of the Nigeria tax administration (a law to provide for the evaluation, collection and accounting for the revenues that accumulate to the Federation, to the Federal States, to the States and the local governments; The powers and functions of tax subjects e

The president of the Senate Godswill Akpabio revealed that the remaining two invoices will be taken into consideration in the plenary Thursday. The Senate had spent almost two hours behind closed doors

Although they have reduced the third reading, the bills will need competition with the Chamber of Representatives and the consent of President Bola Tinubu to make them laws of the Federal Republic of Nigeria.

Legislators approved them following the consideration and adoption of the recommendations contained in the report of the tax reform invoices which was presented on Tuesday by its finance committee led by Senator Sani Musa.

The invoices try to reform the tax framework of Nigeria, strengthen institutions and improve responsibility and compliance.

Among other things, the changes in the law on tax administration provide clarity to the controversial term “derivation”, which refers to the allocation of the revenue based on the place where resources are produced – with “consumption place”, which means that taxes will be shared on the basis of where goods and services are actually used.

According to the new proposed law, the VAT revenues would be distributed as follows: 10% to the federal government, 55% to the states and the territory of the federal capital and 35% to local governments.

Among the states, allocation would be based on equality (50%), on the population (20%) and on the place of consumption, or the location of the consumer at the time of consumption) (30%). For local governments, 70% of the total allocation will be distributed using equality (30%) and the rest based on the population.

A 2% collection service was also adopted. The collection commissions that accumulate to the tax collection agency have been reduced by 4%, which was applicable for non -oil revenue to 2% based on the inclusion of oil revenues. Senator Seriake Dickson, who collected the amendment, observed that the 4% collection will make the funds too much to the tax agency.

For the bill on the Nigeria Revenue Service, the President will act as President of the Board of Directors while an executive vice -president, subject to confirmation of the Senate, would act as head of the service. Clause 7 has been modified to reflect this structure: “The Prime Minister who will be the president; E (B) executive vice -president who will be in charge of the Revenue Service and subject to the confirmation of the Senate”.

To promote inclusiveness, the new bill provides that six executive directors have been appointed, one of each geopolitical area, on a rotational basis, without executive director and vice -president coming from the same state.

Clause 4 expands the functions of the service to include the evaluation of the taxpayers of the companies, to collaborate with the ministries to reform tax regimes and the adoption of measures to “trace, freeze, confiscate or seize the proceeds derived from the tax fraud or the evasion”, while clause 13 (2) requires that the secretary of the Council is a legal or financial professional not least. Annual reports must be submitted no later than three months after each tax year.

The Senate also introduced updated penalties for tax crimes to discourage non -compliance. This includes the N100,000 fine for non -registration (clause 100) in the first month and subsequently n50,000 monthly.

Others include missed returns of returns (clause 101): N200,000 in the first month, n50.000 for each following month; Failure to maintain the registers (clause 102), N10.000 for individuals and N100,000 for companies and failure to remedy the tax (clause 107).

In addition to administrative sanctions, transgressors face imprisonment for a maximum of three years.

In his observations, the president of the Senate, Godswill Akpabio, praised the commission for finances and senators for in -depth work. He also expressed gratitude to the group of “elderly senators” who have connected and deliberated on areas of dispute in the tax invoice through the meetings and consultations with dissenting voices.

He expressed optimism that tax laws revolutionize and optimize the collection of taxes across the country. He expressed satisfaction for the fact that the passage of bills has dissipated the items according to which the interests of a part of the country were to serve, adding that all the Nigerians will benefit from it.

Even in his observations, the vice -president of the Senate, Senator Barau Jibrin, congratulated the entire Senate and in particular the Finance Committee and the Elderly Committee for wisdom and leadership that was shown in the passage of invoices.

“Initially, there were disagreements and there were Rancors here and there. But the Senate, standing on its position as a higher assembly in the land, decided to establish this committee, the Elderly Committee (Special Committee), to examine all those areas of dispute and listen to the opinions of religious leaders, regional organizations and other interested parties,” he said.