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Taxation

Lagos Chamber of Commerce and Industry Calls for Effective Implementation of Newly Passed Tax Reform Laws

Strategic Insights

— 2 min read

The Lagos Chamber of Commerce and Industry (LCCI) has called for effective coordination among federal, state, and local governments to implement newly passed tax reform laws. The chamber commended the federal government for the tax reforms, which are expected to impact four major areas: inflation, trade competitiveness, tax compliance, and investor confidence. The reforms, passed after extensive stakeholder consultations, aim to establish a more transparent, efficient, and growth-aligned fiscal framework in Nigeria.

Key Takeaways:

  • The LCCI has called for effective coordination among federal, state, and local governments to implement the newly passed tax reform laws.
  • The tax reforms, which include the Nigeria Tax Bill (Ease of Doing Business), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill, are expected to impact four major areas: inflation, trade competitiveness, tax compliance, and investor confidence.
  • The reforms aim to broaden the tax base while reducing the informal sector's dominance by establishing a single taxpayer ID, risk-based audit protocols, time-bound refund mechanisms, and taxpayer protection instruments.
  • The tax laws will also significantly improve Nigeria's trade competitiveness by introducing a unified filing system and streamlining state and federal tax processes, with compliance time falling by up to 40%.
  • The reforms are expected to deliver tangible gains in tax compliance, with Nigeria's tax-to-GDP ratio currently at 7.9%, one of the lowest in sub-Saharan Africa.
  • The LCCI Director-General, Dr. Chinyere Almona, stated that the reforms will offer predictability and transparency that domestic and foreign investors seek.
  • The non-oil tax revenues could be increased by N3.2 trillion over the next two years, pushing the tax-to-GDP ratio towards 12% by 2027.
  • Nigerian businesses could see a significant reduction in transaction costs, supporting Nigeria's export competitiveness under the African Continental Free Trade Area (AfCFTA).
  • Dr. Almona highlighted the potential impact of inflation, stating that the broader tax net and initial compliance adjustments may trigger a slight increase in core inflation, estimated between 40-60 basis points.

Statistics:

  • N3.2 trillion: The non-oil tax revenues expected to be increased over the next two years.
  • 7.9%: The current tax-to-GDP ratio in Nigeria.
  • 12%: The tax-to-GDP ratio expected by 2027.
  • 40-60 basis points: The estimated increase in core inflation.
  • Up to 40%: The compliance time expected to fall by the introduction of a unified filing system and streamlining state and federal tax processes.

Sources:

  • Daily Trust
  • Lagos Chamber of Commerce and Industry (LCCI) statement
  • Nigeria Tax Bill (Ease of Doing Business)
  • Nigeria Tax Administration Bill
  • Nigeria Revenue Service (Establishment) Bill
  • Joint Revenue Board (Establishment) Bill

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