The public hearing on Nigeria’s tax reform bills, initiated by President Bola Tinubu, has sparked debates among stakeholders regarding their implications for the Nigeria Customs Service (NCS) and the overall tax system. The proposed reforms aim to modernize tax administration, but concerns exist about their potential to disrupt customs operations and increase financial burdens on citizens. Stakeholders emphasize the need for amendments to mitigate operational inefficiencies and legal conflicts arising from the reforms.
The recent public hearing on the proposed tax reform bills in Nigeria has initiated vigorous discussions among various stakeholders, including associations, agencies, experts, and government officials. These discussions center on the potential for these bills to establish a more efficient tax framework. On October 3, 2024, President Bola Tinubu proposed four tax reform bills aimed at fundamentally restructuring Nigeria’s tax administration and enhancing revenue generation. The bills are the Nigeria Tax Bill 2024, Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill.
During the hearing, stakeholders expressed optimism that the reforms could align Nigeria’s tax system with global standards, thereby boosting transparency, accountability, and fiscal stability. Analysts believe that a restructured tax framework could eliminate inconsistencies, strengthen macroeconomic resilience, and spur economic growth. Despite these anticipated advantages, reservations persist regarding specific provisions that might obstruct effective implementation of the reforms.
Critics caution that without amendments, the reforms may increase the financial burden on Nigerians, deter investments, and render certain government agencies redundant, particularly the Nigeria Customs Service (NCS). The NCS is essential for trade regulation enforcement, and the proposed reforms could adversely affect its operational efficacy and legal mandate. Experts emphasize that assimilating customs administration with an overarching tax policy necessitates thorough evaluation of potential implications on customs procedures, trade agreements, and border management practices.
Stakeholders also point out discrepancies between certain provisions in the reform bills and the NCS Act 2023, potentially leading to policy misalignments within the NCS. These conflicts could spawn challenges in enforcement, inefficiencies in operations, and accountability issues if the reforms proceed without changes. The Association of Nigerian Licensed Customs Agents (ANLCA) expressed concern that repealing the NCS Act, which only commenced implementation in 2024 after extensive legislative processes, might severely disrupt customs operations.
ANLCA President Mr. Emenike Nwokeji articulated that the NCS Act aimed to rectify long-standing inconsistencies in import duty collection. He pointed out that with only about 15 percent of the Act implemented, introducing a new tax bill that centralizes all revenue under one authority could lead to substantial legal and operational conflicts. He implored the Federal Government to enhance the NCS while ensuring proper alignment with other revenue bodies. Furthermore, he underscored that essential expertise within the customs service could be jeopardized by the reforms, emphasizing the need for specialized training to sustain critical operations.
Customs and tax expert Mr. Okey Ibeke complemented these concerns, asserting that customs operations encompass more than mere revenue collection; they demand specialized knowledge. He cautioned that the proposed tax reforms could disrupt fundamental customs functions without necessary amendments, particularly regarding the capability of designated revenue agencies to manage customs affairs. Ibeke articulated that these agencies might face difficulties in assessing imports and detecting misclassifications, thereby endangering accurate revenue declarations.
He also elaborated on the complexity of import classification, tariff regulations, and valuation that NCS personnel are presently equipped to handle. Ibeke warned that the intricate responsibilities critical for revenue collection could be inadequately addressed by general tax administrative systems. Additionally, he acknowledged the recent advancements made by the NCS through its Trade Modernisation Project, highlighting the danger that repealing the Act could reverse these improvements.
The Customs Consultative Committee (CCC) shared similar apprehensions regarding legislative inconsistencies, operational inefficiencies, and economic risks associated with the proposed reforms. Secretary Dr. Eugene Nweke urged the preservation of the NCS’s autonomy while advocating for necessary reforms and public-private partnerships. Meanwhile, Comptroller-General of Customs Adewale Adeniyi recognized the need for tax law revisions, asserting that current laws fail to address modern fiscal challenges. He expressed optimism that the reforms could foster Nigeria’s economic growth while reiterating the importance of aligning the final legislation with the NCS Act to uphold the agency’s vital functions and operational efficiency.
In conclusion, the proposed tax reform bills in Nigeria have kindled significant debate among stakeholders regarding their potential impact on the Nigeria Customs Service and the broader economic landscape. While there is optimism about aligning Nigeria’s tax system with international standards, concerns persist regarding the operational and legal challenges that may arise from the reforms. Stakeholders advocate for careful legislative adjustments to ensure that the reforms do not undermine the efficacy and autonomy of the NCS, which is essential for trade regulation and revenue generation. A balanced approach that fortifies Nigeria’s tax framework while preserving the integrity of its customs operations is imperative for successful implementation.
Original Source: nannews.ng
