KEY POINTS

• A breakdown of derivation principle will spell tax reform failure — CITN urges FG.
• Prays for current and past fiscal incentives and tax relief provided by the government.
• It supports modern system such as TaxProMax and Tax wallet for compliance ease.

The Federal Government proposed tax reform bills have got the backing of the Chartered Institute of Taxation of Nigeria (CITN) even as the Institute urged reconsideration of the derivation principle.

CITN President, Samuel Agbeluyi who spoke during a media workshop in Lagos also advised that reform should be flexible if it has to succeed.

Agbeluyi said if the derivation principle could have a problem, it can be dropped ‘because we can’t throw the baby with the bathwater.’

The government has strong commitment to revamp the tax system, lessen dependence on oil revenues, and maintain fiscal stability, he noted.

Key tax initiatives

Agbeluyi applauded several government-led initiatives aimed at modernizing Nigeria’s tax landscape:
– Executive Orders and Tax Relief: Back in July, President Bola Tinubu introduced substantial tax relief measures which included confining the 5 percent excise tax on telecom services to a temporary three years.
– Presidential Fiscal Policy and Tax Reforms Committee: Founded in August 2023 to confront problems in the fiscal governance and revenue transformation.
– Gas Sector Incentives: Meanwhile, in a December 2023 circular, the government waived import duty and zero rated VAT on essential gas component and services.
– Withholding Tax Regulations 2024: The updated tax deduction rules gave clear across all the regimes.

He also lauded enhancements to the TaxProMax system as well as the new Tax Wallet feature for easing tax compliance for firms.

Fact drives tax discussion

Agbeluyi also asked stakeholders to ensure discussions are evidence based, that is on verifiable data.

He said, ‘The significance of taxation in the developmental process in Nigeria cannot be over emphasized’, adding that CITN is in support of reforms that address the systemic issues.’