Samuel Agbeluyi, president and chairman of Council of the (CITN) said that the incentive of increasing Value Added Tax (VAT) from 7.5 percent to 10 percent far outweighs the hike.
He said this ahead of the institute’s yearly tax conference, with the theme ‘Taxation for Development, Policies, Law and Implementation’, slated to be held in Abuja from May 12 to 16.
He said this, explaining the benefits of the proposed tax reform bills.
“ The benefit in terms of incentive is massive, an example is that certain things you can’t claim as your VAT returns before, you can now claim as your income tax,” Agbeluyi said.
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VAT refers to a consumption tax on goods and services levied at each stage of the supply chain where value is added.
However, the House of Representatives has retained Value Added Tax, VAT, at 7.5 percent and rejected a staggered increase to 15 percent by 2030 as proposed in the Tax Reform Bills being debated at the National Assembly.
Agbeluyi said that a key incentive of the proposed tax bill is the ability for new companies to immediately deduct the full cost of capital outlays (equipment, buildings, etc.) as income tax in the year of purchase. Under the current system, these costs can only be claimed gradually over several years through capital allowances. He emphasised that this immediate deduction is a major benefit for businesses and investors.
Furthermore, he said that the process of claiming tax funds is being simplified, contributing to an improved ease of doing business. This tax-free status, coupled with simplified processes, offers certainty for businesses and makes Nigeria more attractive to international investors who need to understand their future tax exposure.
“Currently, individuals earning N70,000 pay personal income tax, but this is set to change, and they will no longer be taxed,” he said.
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He said the tax reform bills informed the theme of the conference, speaking to the components of the Nigerian tax system, especially on the multiplicity of taxes across the board.
While he looked forward to the bill being passed substantially the way it is, he said that if achieved, it would draw in more investors into the country.
Similarly, to plug loopholes for revenue leakages, the CITN chief highlighted the processes of assessment, collection, and accounting, stating that once these are properly followed through, the avenue for revenue leakages would be tamed.
He also advocated for sanctions for those involved in tax maladministration. Chairman of the 27th yearly tax conference, Adeyemi Sanni, gave highlights on what should be expected during the conference and the impact on members and the economy at large.
