The Nigeria Extractive Industries Transparency Initiative (NEITI), has supported the 2024 Tax Reform Bill currently before the National Assembly, saying that its enactment has the potential to modernize Nigeria’s tax system.

A statement by NEITI’s Ag. Director, Communications & Stakeholders Management, Obiageli Onuorah, stated on Tuesday, January 21, 2024 that the agency’s position was made known in a memo signed by its Executive Secretary, Dr Orji Ogbonnaya Orji and addressed to the leadership of the National Assembly and the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.

According to Dr. Orji, the bill could streamline and broaden Nigeria’s tax administration and base to align with global best practices.

The pointed out that NEITI’s observations followed a detailed review of the draft legislation, which showed extensive research and consultation to produce the innovative provisions that are being deliberated upon.

The draft tax bill, NEITI noted, emphasized consolidation of legal frameworks, taxing digital assets, addressing resident and non-resident taxation, and introducing measures to curb tax evasion while demonstrating a strong commitment to fiscal transparency and efficiency.

“A detailed review of the Bill revealed that it has the potential to impact positively on revenue generation, household livelihoods, job creation, and overall economic opportunities,” the transparency and accountability agency stated.

As an agency with legitimate interests in the draft legislation, NEITI said “the public debate generated by the Bill underscored the overwhelming public interest by Nigerians and the need for greater clarity and trust in its provisions after it is finally passed into law”.

Despite the potentials of the Bill, NEITI said its section-by-section review of the draft law revealed its strengths and weaknesses, particularly as they affect the extractive industries, which is the core of NEITI’s specific mandate and thus made several recommendations to bridge the gaps in the implementation of the proposed law.

According to NEITI, Sections 1 and 2 aim to ensure a unified tax legislation across Nigeria for all individuals and legal entities. However, they do not have explicit guidelines to harmonize federal and state tax laws and clarify roles of sub national governments”

Commending the intent of the Bill on unifying tax administration in the country, by repealing existing Acts and consolidating them into a single framework, NEITI stated that “Careful management of the transition process and robust public awareness campaigns were critical to avoid administrative confusion”.