Nigeria’s Senate has approved a series of tax reform bills aimed at increasing government revenue, advancing President Bola Tinubu’s economic agenda despite dissent within his own All Progressives Congress. This legislative step brings Tinubu closer to completing a fiscal plan that has drawn criticism over its potential impact on citizens.
Since taking office, Tinubu has introduced sweeping economic measures, including eliminating fuel subsidies and twice devaluing the naira. His latest focus is on restructuring the tax system to improve efficiency and reduce reliance on borrowing.
Among the most contentious aspects of the reform is a proposed rise in value-added tax from 7.5% to 12.5% starting next year. Opponents warn that such changes could intensify financial hardship for ordinary Nigerians, especially amid already high living costs in the country of over 200 million people.
Still, the Senate’s endorsement of the four tax bills—despite opposition from lawmakers and governors within the ruling party—represents a significant win for the Tinubu administration. The reforms aim to address Nigeria’s low tax-to-GDP ratio, which currently stands at just 10.8%, far below global averages.
Senator Sani Musa, who chaired the Senate committee responsible for reviewing the bills, revealed that their passage has triggered amendments to Nigeria’s oil law. “Fiscal administration duties, such as royalty and petroleum profit tax collection, [will be handed over] to the newly proposed Nigeria Revenue Service,” he said on Friday.
He added that all other aspects of the oil law remain unchanged.
The House of Representatives had already approved the bills in March. With the Senate now aligned, both chambers will need to reconcile any differences before forwarding the unified legislation to President Tinubu for final approval.
