The President of the Senate, Godswill Akpabio,  has assured stakeholders in the business community and beyond that the Red Chamber would be thorough as it is not in a hurry to pass the tax reform bills.

Akpabio gave the assurance during the public hearing on tax reform bills organised by the Senate Committee on Finance, chaired by Senator Sani Musa (APC, Niger).

The four bills are: the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, the Joint Revenue Board Bill, and the Nigeria Tax Bill, which have been passed for a second reading by both the Senate and the House of Representatives.

Stakeholders representative from the different economic sectors presented their recommendations on the bills during the  public hearing.

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In response,  Akpabio said that after collecting inputs from the public, the committee will thoroughly review the submissions on the proposals and make necessary adjustments before submitting its report for consideration.

“So we are not in a hurry. We want the best for the country. We are not making laws for ourselves. We are making laws for future generations”, he said.

Akpabio emphasised the need to modernise Nigeria’s tax system, aligning it with contemporary realities to foster growth, transparency, and efficiency.

Akpabio described the reforms as a “transformative step forward, and noted that taxation is not merely a government function but a shared responsibility that shapes national prosperity.

“A nation that fails to adapt its revenue system to the realities of our time risks stagnation and decline,” he stated. According to Senator Akpabio, these reforms go beyond legislative formalities.

“They represent a collective effort to establish a tax framework that is robust, transparent, and business-friendly, ensuring that Nigeria’s economy thrives in an increasingly competitive global landscape”, he said.

National interest will guide process – Senate panel

Earlier, the Chairman of the Senate Committee on Finance, Sani Musa said that the committee will be guided by national interest, fairness and inclusivity in handling the proposed tax reform.

He said the committee has acknowledged concerns about alleged marginalisation, disproportionate sharing, and possible biases in tax administration and revenue allocation.

He assured that the process will be thorough, inclusive, and guided by national interest.

“Our goal is to develop a tax framework that promotes economic prosperity, encourages investment, and strengthens Nigeria’s fiscal sustainability. 

A fair, transparent, and efficient tax system is fundamental to economic growth and national development.

“As we deliberate, let me emphasise that transparency, fairness, and inclusivity will be our guiding principles,” he said.

The National Bureau of Statistics (NBS) has reported that Nigeria’s annual gross domestic product (GDP) grew by 3.84 per cent in the fourth quarter (Q4) of 2024, compared to 3.46 per cent in Q3 2024 and 3.46 per cent in Q4 2023.

According to the NBS report, the GDP growth was primarily driven by the services sector, which expanded by 5.37 per cent and contributed 57.38 per cent to the overall GDP.

“The agriculture sector grew by 1.76%, from the growth of 2.10% recorded in the fourth quarter of 2023,” the report stated.

In contrast, “The growth of the industry sector was 2.00%, a decline from 3.86% recorded in the fourth quarter of 2023.”

The services sector’s contribution to the aggregate GDP in Q4 2024 was higher compared to the same quarter in 2023.

Overall, the annual GDP growth for 2024 was 3.40%, up from 2.74% in 2023.

The NBS also reported that the nominal GDP reached N78.37 trillion in Q4 2024, compared to N65,908,258.59 million in Q4 2023, representing a year-on-year nominal growth of 18.91%.

Oil Production Drops, Non-Oil Sector Contributes Significantly

The NBS report indicated that Nigeria’s average oil production in Q4 2024 was 1.54 million barrels per day (mbpd).

This is “0.03million bpd lower” than the Q4 2023 production volume of 1.56mbpd and “0.06mbd higher than the daily average production of 1.47mbpd recorded in the third quarter of 2024”.

“The real growth of the oil sector was 1.48% (year-on-year) in Q4 2024, indicating a decrease of 10.64% points relative to the rate recorded in the corresponding quarter of 2023 (12.11%),” the report explained.

The oil sector contributed 4.60 per cent to Nigeria’s total real GDP in Q4 2024, down from 4.70 per cent in the same period in 2023 and 5.57 per cent in the previous quarter.

The non-oil sector grew by 3.96 per cent in real terms in Q4 2024, higher than the 3.07 per cent in Q4 2023 and 3.37 per cent in Q3 2024.

The growth was primarily driven by financial and insurance institutions, information and communication (telecommunications), agriculture (crop production), transportation and storage (road transport), trade, and manufacturing.

“In real terms, the non-oil sector contributed 95.40% to the nation’s GDP in the fourth quarter of 2024, higher than the share recorded in the fourth quarter of 2023 which was 95.30% and higher than the third quarter of 2024 recorded as 94.43%,” the NBS stated.

This report follows the NBS announcement on February 18th that Nigeria’s inflation rate decreased from 34.8 per cent in December 2024 to 24.48 per cent in January 2025.

The Manufacturers Association of Nigeria (MAN) said on Tuesday that the National Assembly should go on with the proposed reform of the free-trade zone operations in the country.

The leadership of the MAN expressed their conviction that the amendments will ensure equitable tax treatment for companies operating in the customs territory and those licensed to operate within the free zones with respect to sales into the customs territory, thereby enabling fair competition while protecting the country’s tax base.

In the position statement,  signed by the association’s Segun Ajayi-Kadir, Director-General,  MAN noted that licensed entities will also enjoy similar incentives available to entities within the customs territory with respect to their sale of goods and services into the Customs Territory, a win-win outcome.

“It is important for us to situate this conversation within the context of what export processing zones and export free trade zones were created to achieve and the value they are purposed to deliver to the economy.

It is clear from the enabling laws and in the 3rd Schedule to the NEPZA Act with the first listed approved activity stated as “manufacturing of goods for export”, while other activities relate to international services, transshipment and services within the zones.

The emphasis here is “within the zones,” he said.

He argued that for instance, banking is listed as an approved activity but it does not mean that a bank can set up in the zone and render banking services across Nigeria without paying taxes, rather it refers to banking within the zone and exports.

So, this should explain how other activities (apart from manufacturing for export) should be viewed.

“The concern of my members and the contention here are obviously pertaining to tax incentives.

In specific terms, Section 8 on exemption from taxes only applies to approved enterprises operating within a Zone.

They are exempted from all Federal, State and Local Government taxes, levies and rates. Sales to the customs territory is neither an approved activity nor is it within the zone.

“However, section 18 permits the sale of goods and services to the customs territory, but this does not confer tax exemption on the sales, but rather a regulatory matter regarding what is permissible.

“Over time, the provisions of sections 8 and 18 have been misinterpreted as not only permitting the sale into the customs territory but also as tax exemption.

“So again, I say this is where the concern of my members and the contention lies: This position is not consistent with the law and it undermines tax-paying entities operating within the customs territory and producing similar goods and services.

Where does the tax exemption enjoyed by the companies operating within the zones, leave my more than 2,500 members who operate outside the zone, in terms of level playing field, competitiveness, fairness and equity?

They find themselves in a disadvantaged position and are rendered less competitive”, he stated.

Ajayi-Kadri said that he believed that the tax reform bill before the National Assembly has actually come to the rescue.

“The bill seeks to bring clarity and equity by stating that sales to the customs territory are taxable, not just for import duties and VAT, but also for CIT purposes.

That is to say that all sellers in the customs territory should be subject to the same tax obligations.

“Subsequently, I don’t think the relevant provisions of the tax reform bill amount to a reversal of the incentives, not at all. It is actually a clarification to align with the intent and letters of the enabling laws.

This is in line with global best practice for free zones. In fact, Nigeria will continue to be more generous even after the proposed amendments.

An example that is not farfetched is the situation in nearby Ghana. Ghana only allows up to 30% of sales into the customs territory subject to payment of duties and taxes, including CIT.

Whereas we allow 100% sales. Exports by a zone entity are tax-free only for 10 years after which up to 8% CIT will apply. Nigeria offers indefinite tax exemption on exports.”