The proposed Value Added Tax increase in the 2024 tax reform bills has faced opposition from the Trade Union Congress and the Supreme Council for Sharia in Nigeria. The tax reform proposals, which include several bills, were sent by the President and are currently under review by the National Assembly.
During a public hearing at the National Assembly, the Trade Union Congress criticized the planned gradual VAT increase, stating that it could worsen Nigeria’s economic challenges. They recommended maintaining the VAT rate at 7.5% and increasing the tax exemption threshold. Similarly, the Supreme Council for Sharia in Nigeria called for a reduction of VAT to 5% or retention at 7.5%.
Concerns were also raised about the inheritance tax provision in the tax bills, with objections based on Islamic inheritance laws. The Kano State Government supported the tax reforms but highlighted the need for fairness and equity in tax policies.
The Nigeria Customs Service warned of jurisdictional conflicts within the bills, citing problematic sections and potential elimination of roles. The Nigeria Liquefied Natural Gas urged lawmakers to exempt export processing zones from VAT to maintain global trade competitiveness.
The Fiscal Responsibility Commission expressed support for the bills, emphasizing alignment with existing acts and benefits for small businesses. However, they called for amendments to ensure compliance with relevant laws.
Ultimately, the Senate and House of Representatives will consider public feedback before finalizing amendments and passing the bills into law.