The Nigeria Extractive Industries Transparency Initiative (NEITI) has expressed support for the 2024 Tax Reform Bill currently under debate in the National Assembly, urging lawmakers to consider introducing tax exemptions for small businesses, startups, renewable energy initiatives, and other sustainability-focused projects. This recommendation aims to promote reinvestment and economic growth in Nigeria.
In a memo to the National Assembly, NEITI’s Executive Secretary, Dr. Orji Orji, emphasized the importance of clear thresholds for significant economic presence and streamlining taxation for non-resident entities. While acknowledging the Bill’s potential benefits, NEITI pointed out key areas that require improvement, particularly regarding the extractive industries, which are central to its mandate.
The initiative highlighted the lack of clear guidelines to harmonize federal and state tax laws and stressed the need for effective public awareness campaigns to ensure smooth implementation of the tax reforms. NEITI also raised concerns about the provisions for digital asset taxation, resident and non-resident taxation, and the taxation of petroleum operations, recommending several adjustments to ensure fairness, efficiency, and alignment with global practices.
Specifically, NEITI proposed tax exemptions or phased implementation for small businesses, guidance for resolving jurisdictional conflicts between state and federal tax systems, and tax incentives for renewable energy and energy transition projects. The agency also emphasized the need for clearer definitions and guidelines for various taxable assets and events.
NEITI further recommended the inclusion of reduced tax rates or exemptions for small-scale service providers and called for streamlined procedures to simplify compliance for small and medium-sized enterprises (SMEs). The agency also urged investment in capacity-building for tax administrators and the adoption of digital tools for tax monitoring and compliance.
Overall, NEITI’s recommendations aim to ensure that the tax reform benefits all sectors of Nigeria’s economy, fostering growth in startups, sustainable industries, and the broader economic landscape. The agency has called for robust stakeholder engagement, particularly with civil society organizations, to ensure the successful implementation of the proposed reforms.