By Enudi Marcus
The proposed tax reform bill in Nigeria has sparked intense debates across the nation. Proponents argue that it’s necessary for fostering equity, while detractors raise concerns about its implications. At its core, the bill aims to promote fairness and economic justice, particularly for those in the informal sector who labour tirelessly to sustain themselves and their families in the face of economic downturn.
Nigeria’s tax-to-GDP ratio is alarmingly low, hovering around 6%, significantly below the 17% average for Sub-Saharan Africa. This disparity highlights a critical issue: many Nigerians, particularly in the informal sector, do not contribute their fair share to national coffers, while those in the formal sector bear a disproportionate burden.
The tax reform bill seeks to address these disparities by broadening the tax base, ensuring compliance, and redistributing the tax burden more equitably. It aligns with provisions in Nigeria’s constitution and tax laws that emphasize fairness and equity.
For instance, the Nigerian Tax Policy (2017) outlines principles such as inclusiveness, accountability, and progressive taxation.
The bill also draws on international best practices, emphasizing progressive taxation, where individuals and entities contribute based on their income and capacity. This approach aligns with the global trend of prioritizing economic justice and reducing income inequality.
Ultimately, the tax reform bill is not a punitive measure, but a reflection of fairness. It ensures that everyone contributes proportionally to the nation’s development, irrespective of region or status. By embracing tax reforms, Nigeria can cultivate a culture of accountability and efficiency in resource management, leading to a more prosperous nation.
