The Civil Society Legislative Advocacy Centre (CISLAC) has called on the National Assembly to prioritize equity, transparency, and inclusiveness in the Nigeria Tax Bill, 2024, describing the legislation as a transformative opportunity for the country’s fiscal framework.

In a statement signed by its Executive Director, Comrade Auwal Musa Rafsanjani, CISLAC commended the intent of the bill to consolidate tax provisions, enhance administration, and promote transparency. However, the organization highlighted critical gaps that must be addressed to ensure the bill fosters economic inclusivity and sustainable governance.

Rafsanjani expressed concern over the proposed derivation model for VAT revenue distribution, warning that it risks exacerbating economic disparities among states. To mitigate this, CISLAC proposed the establishment of an Equalization Fund to support less-developed states in building their human capital and institutional capacity until 2030. Additionally, the organization recommended collecting VAT at the point of sale rather than at corporate headquarters to ensure transparency and equitable revenue distribution.

CISLAC also raised issues with the proposed VAT rate increase, which could double by 2030, citing potential inflationary effects and heightened poverty levels. It urged the government to maintain the current VAT rate of 7.5% until economic stability is achieved, alongside expanding VAT exemptions to include essential items like cooking energy and electricity for consumer use to shield low-income households from regressive tax impacts.

The statement further emphasized the need for transparency in administering tax incentives, recommending stronger enabling laws for the Nigerian Investment Promotion Commission (NIPC) to prevent misuse. Clear guidelines and compliance mechanisms were also suggested to ensure multinationals and high-turnover companies contribute fairly to national revenue.

Rafsanjani highlighted the importance of transparent utilization of revenue from the Development Levy, suggesting it should be channeled towards enhancing education and institutional capacity in underserved regions to foster long-term human capital development.

CISLAC also urged the National Assembly to engage civil society organizations and other stakeholders in the legislative process, ensuring the bill addresses the aspirations of all Nigerians. The Federal Government was called upon to digitize tax collection processes, curb corruption, and improve transparency, while state governors were urged to prioritize sustainable industrial development and foster public-private partnerships to drive economic growth.

The statement concluded by stressing that the Nigeria Tax Bill, 2024, represents a significant opportunity to address socio-economic inequalities and strengthen public trust in government. CISLAC reiterated its commitment to collaborating with the National Assembly and other stakeholders to ensure the bill achieves its transformative potential.