▪︎Dr Jumoke Oduwole, Minister of Industry, Trade and Investment.

The Nigerian Economic Summit Group (NESG) has stressed the need for Nigeria to divert its trade pattern towards countries that are unaffected by the U.S. tariffs.

The NESG made the call in its latest Foreign Trade Alert: 2024Q4 & Full Year 2024.

The report highlighted Nigeria’s vulnerability to global trade disruptions, particularly in its import-dependent industrial sector.

“The trade war between the U.S. and China needs to be hedged against.  This would reduce tariff-induced increases in import bills, considering that the country’s import-dependent non-oil industrial sector is highly vulnerable,” the report noted.

The United States imposed a 10% tariff on Chinese imports in February 2025, with plans to increase it by another 10% in April.

In retaliation, China announced additional tariffs of 10-15% on certain U.S. imports starting March 10, 2025, along with a series of export restrictions targeting designated U.S. entities.

These measures are expected to disrupt global supply chains, slow world trade growth, and drive up the prices of globally traded commodities.

Given Nigeria’s heavy reliance on imported manufactured goods and raw materials, NESG warns that the country could face significant economic challenges if these trade tensions escalate further.

China remained Nigeria’s largest trading partner in Q4 2024, followed by India, Belgium, the U.S., and France.

The most imported commodities during the period included refined petroleum products, sugar cane, and spare parts.

However, Nigeria’s reliance on imports, particularly from China, makes it susceptible to price fluctuations and supply chain disruptions stemming from the U.S.-China trade conflict.

The House of Representatives has retained Value Added Tax (VAT) at 7.5 percent, rejecting a proposed gradual increase to 15% by 2030.

The House also dismissed a proposal to reintroduce inheritance tax under the guise of taxing family income.

The Chairman of the House Committee on Finance, Rep. James Faleke, during today’s plenary, stated that the submitted report represents a comprehensive review of the bills, incorporating extensive public input.

The report covers four key bills aimed at overhauling Nigeria’s tax framework: Nigeria Tax Bill Nigeria Tax Administration Bill Nigeria Revenue Service (Establishment) Bill Joint Revenue Board (Establishment) Bill Key Amendments in the Tax Reform Bills Nigeria Revenue Service (NRS) Bill .

The NRS will now focus on federal-level revenue collection, excluding individual taxpayers in states and the Federal Capital Territory (FCT). Board Composition: Section 7 now requires six executive directors, each appointed by the president from the six geopolitical zones on a rotational basis.

Each state and the FCT will also have a representative on the board.

Secretary Qualifications: Section 13 mandates that the Secretary to the Board must be a lawyer, chartered accountant, or chartered secretary at the level of Assistant Director or higher.

Fixed Funding Rate: The NRS will now receive a 4% cost-of-collection rate (excluding royalties), subject to National Assembly approval.

Borrowing Powers Restricted: Section 28 now requires Federal Executive Council (FEC) and National Assembly approval before the NRS can secure any loans.

Joint Revenue Board (JRB) Bill Tax Appeal Commissioners’ Criteria Revised: Section 25 removes the requirement that commissioners must have business management experience, as the Committee deemed it irrelevant.

Strengthened Tax Ombud’s Independence: Section 43 mandates that the Tax Ombud’s Office be funded directly from the Consolidated Revenue Fund, eliminating reliance on external donations.

Independent Funding for Tax Appeal Tribunal (TAT): The tribunal will now operate independently of the Federal Inland Revenue Service (FIRS) to prevent conflicts of interest.

Stricter Adherence to the Evidence Act: New rules ensure that tax appeal proceedings strictly follow the Evidence Act.

Taxpayer Identification Number (TIN) Processing:

The timeline for issuing TINs has been extended from two working days to five to accommodate administrative delays.

Faster Tax Returns for Ceased Operations: Companies ceasing operations must now file income tax returns within three months, down from six months, to prevent revenue loss.

VAT System Adjustments: Section 22 ensures that taxable supplies are attributed to their place of consumption, addressing regional imbalances.

VAT Fiscalisation System: Section 23 introduces a new regulatory framework to improve VAT collection.

Increased Reporting Thresholds for Banking Transactions:

Individuals: ₦25 million → ₦50 million Corporate Entities: ₦100 million → ₦250 million

Judicial Oversight on Asset Seizure: Section 60 mandates that tax authorities must obtain a court order before seizing movable assets.

Mandatory Electronic Taxpayer Records Access: Section 61 formalizes the government’s right to access electronically stored tax records in line with modern practices.

New VAT Revenue Distribution Formula: 70% distributed equally among local governments 30% based on population .

General Amendments Across Tax Bills VAT Rate Maintained at 7.5% –

The Committee rejected the proposal to gradually increase VAT to 15% by 2030. Petroleum Gains Tax Reduced to 30% – Section 78 revises the tax rate on petroleum gains from 85% to 30%.

Excise Duty Provisions Removed – Excise duty-related provisions were deleted due to concerns about their negative economic impact.

Higher Turnover Threshold for Small Companies:

A business will now be classified as a small company if its annual turnover is ₦100 million or less (asset cap remains at ₦250 million).

New Penalties for Virtual Assets Service Providers (VASPs):

Stricter fines and potential license suspensions for non-compliant crypto and digital asset businesses.

While submitting the report, Rep. Faleke highlighted the importance of the tax reform bills in modernizing Nigeria’s tax system, boosting revenue collection, and fostering economic growth.

“These Bills are critical to implementing a modern, transparent, and efficient tax system that will support economic growth and improve revenue collection,” he said.

He added that the review process was extensive, incorporating input from the public and key government agencies, including: Nigeria Export Processing Zones Authority (NEPZA) National Agency for Science and Engineering Infrastructure (NASENI) National Information Technology Development Agency (NITDA) Tertiary Education Trust Fund (TETFund)

“We carefully examined every submission to ensure that public opinion was reflected in our recommendations. This process involved a thorough review of existing laws proposed for repeal or amendment,” Faleke noted.

The amendments impact key laws, including: Companies Income Tax Act (CITA) Value Added Tax Act (VAT Act) Personal Income Tax Act (PITA) Federal Inland Revenue Service (Establishment) Act Petroleum Industry Act Nigeria Export Processing Zones Act Oil and Gas Free Trade Zone Act

The House of Representatives is expected to deliberate on the report in the coming weeks as part of its legislative process.

THE Association of Nigerian Electricity Distributors, (ANED), the professional association of the 11 electricity distribution companies, DisCos, in the country, said, yesterday that the Sam Ethnam Air Force Base Ikeja, Lagos, would not be reconnected to the grid without the settlement of its N4.3 billion debt to Ikeja Electric Plc.

The Sam Ethnam Air Force Base Ikeja was disconnected last week due to the unpaid debt, which impacted negatively on the operations of the Ikeja Electric Plc.

In reaction to the Airforce officials’ invasion of the headquarters of the Ikeja Electric Plc, vandalizing equipment and beating personnel and others, including journalists, Executive Director, Research and Advocacy, ANED, Sunday Oduntan, said: “Reconnection is not possible immediately.

They have to pay what they owe us.” Vanguard, learned weekend that there were ongoing engagements, targeted at ensuring payment and reconnection of The Sam Ethnam Air force Base Ikeja

He also said: “The attack of Ikeja Electric Plc should not happen in a civilian administration because there are better ways of resolving issues.”