The Fiscal Responsibility Commission (FRC) has expressed strong support for the Tax Reform Bills currently before the National Assembly. The bills, which were developed by the Presidential Fiscal Policy and Tax Reforms Committee, aim to improve fiscal governance, transform public revenue architecture boost economic growth.
The Chairman of the Commission, Victor Muruako Esq made this known at an interaction with academics and journalists at the sidelines of the Fellowship Lecture and Investiture Ceremony of the Capital Market Academics of Nigeria (CMAN), which held on 9th December 2024 at the NDIC Academy, Central Business District, Abuja. He revealed that a critical analysis of the bills by the Fiscal Responsibility Commission has found them as not containing any issue or item that could be said to be skewed to favour any region or section of the Country. “The bills rather create more equitable distribution of resources amongst Nigeria’s federating states,” Mr Muruako added. He averred that his Commission’s analyses also confirm that the proposed reforms are designed to benefit all Nigerians, particularly low-income earners and Micro Small and Medium Businesses (MSMBs).
Muruako outlined some of the key benefits of the reforms to include:
▪ Tax Relief for Low-Income Earners: Individuals earning less than N1.7 million annually will pay less income tax.
▪ Reduced Tax Burden on Small Businesses: Businesses with turnovers below N50 million will be exempted from tax, while over 90% of small businesses will no longer pay profit tax.
▪ Simplified Tax System: The number of taxes and levies will be significantly reduced, streamlining the tax administration process.
▪ Increased Revenue for Subnational Governments: States and local governments will receive a larger share of VAT revenue, empowering them to provide better public services.
▪ Improved Ease of Doing Business: The reforms will reduce the administrative burden on businesses and make it easier to comply with tax regulations. The Executive Chairman is upbeat that the tax relief for low-income earners will enhance savings and capital formation at household levels. He expressed confidence that given the positive correlation between savings and investment, the increase of small household investments across board would lead to improvements in the sustainable growth of the nation’s economy. He also opined that the reduced tax burden on small businesses would give MSMEs breathing space, enabling them to grow organically, hence contributing to sustained increase in the nation’s GDP in the near future.
On the recent controversies over the bills, Victor Muruako praised His Excellency President Bola Tinubu as a democrat for allowing room for further dialogue. He further appealed to all stakeholders across geopolitical zones to support the bills because their transformative potentials stand to benefit every Nigerian.
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