The Arewa Consultative Forum (ACF) has recommended the retention of the 7.5% Value Added Tax (VAT) rate in the proposed Tax Reform Bills.

In a detailed submission to the National Assembly, the ACF outlined its observations and recommendations on the Executive Tax Reform Bills, which aim to overhaul Nigeria’s tax laws significantly.

The recommendations stem from a special-purpose committee of experts set up by the ACF’s Board of Trustees to review the bills and provide informed input.

In the report, signed by its National Publicity Secretary, Tukur Muhammad-Baba, the ACF stated that maintaining the 7.5% VAT rate aligns with the prevailing economic realities faced by both citizens and businesses.

The Forum also emphasised the need for improved efficiency in VAT collection, better revenue generation through the formalisation of the informal sector, and the adoption of digital technologies. Additionally, it advocated for a broader tax base by encouraging private sector investments.

The ACF further recommended the removal of VAT on agricultural equipment. It also proposed that the words “supply” and “supplies” in Chapter 6 (VAT), Part 1, Sections 143, 144, 145, and 147 of the Tax Administration Bill be replaced with “consumption” and “consumptions” to ensure clarity.

Moreover, the Forum urged that the term “derivation” be clearly defined, with its distribution determined through consensus involving state and local governments, alongside the guidance of the Revenue Mobilisation and Fiscal Commission (RMFC).

The ACF also called for a significant reduction in the powers granted to the Chief Executive Officer and Chairman of the Board of Directors/Governance of the Joint Revenue Board. It argued that the proposed provisions concentrate excessive supervisory and accountability powers in a single individual.

Instead, the Forum recommended replacing the eight proposed coordinating directors with six executive directors, one from each geopolitical zone, to ensure balanced representation. It also insisted that these directors should be nominated by the President and confirmed by the Senate.

Further recommendations included retaining the Tertiary Education Trust Fund (TETFUND) and the National Information Technology Development Agency (NITDA) by rewording Section 69 of the proposed Nigeria Tax Bill as a Development Levy, which should be allocated to TETFUND, NITDA, the National Agency for Science and Engineering Infrastructure (NASENI), and the Education Loan Fund.

The Forum encouraged all stakeholders to actively participate in the public hearings conducted by the relevant committees of the National Assembly (Senate and House of Representatives) to present their submissions on the proposed tax bills.

“All interest groups are encouraged to take the public hearings seriously and contribute towards the formulation of robust laws that will stand the test of time and serve the national interest,” the ACF stated.