The Nigeria Extractive Industries Transparency Initiative (NEITI) has pledged to support the legislative process of the 2024 Tax Reform Bill by providing technical inputs, data-driven insights and policy recommendations, to ensure accountability, strengthen fiscal transparency, and maximise resource benefits of the extractive sector for all Nigerians.
Executive Secretary, NEITI, Orji Ogbonnaya Orji who made the disclosure at the inaugural Rembinar Dialogue series convened in collaboration with OrderPaper Nigeria, regretted that the persistent challenges of tax evasion, weak enforcement mechanisms, revenue leakages and lack of transparency in fiscal regimes, were the major factors hindering the extractive industry from assuming it’s full revenue generating potential to drive sustainable development in the country.
Orji who stressed that the extractive sector remains the backbone of Nigeria’s economy, accounting for a substantial share of government revenue and foreign exchange earnings, added that an advanced comprehensive tax reform would not only modernise Nigeria’s tax system by improving tax administration, but it would also streamline legal frameworks, enhance compliance across various industries, including the oil, gas, and mining sectors.
According to him, key highlights of the bill includes: consolidation of tax laws to improve clarity and compliance and taxation of digital assets and non-resident entities, aligning Nigeria with global best practices,.stronger anti-tax avoidance measures, including minimum effective tax rates to curb profit shifting; Improvements in VAT administration, double taxation relief, and tax incentives for priority sectors taxation relief, and tax incentives for priority sectors
The NEITI Boss who noted that the agency was co-opted as part of the Tax Reform Committee, however noted that the Agency has sent strong recommendations to the National Assembly on the some areas of which concerns were raised to be addressed.
He said: “While these provisions signal progress, we must also critically assess their impact on NEITI audits, revenue transparency, and sector-specific compliance—which brings us to today’s discussion.
“Are the tax administration reforms aligned with our extractive industry audit framework? How do we ensure extractive companies fully disclose their tax obligations?While the bill seeks to boost government revenues, are there provisions to maintain Nigeria’s competitiveness in attracting extractive sector investments?
“What safeguards should be introduced to prevent over-taxation from discouraging long-term investments?How do we strengthen enforcement mechanisms to combat tax evasion, illicit financial flows, and profit shifting by multinational corporations?.What role can inter-agency collaboration play in improving compliance and closing revenue leakages,” he queried.
The Founder/CEO of OrderPaper Nigeria, Oke Epia who drummed support for the Tax Reform Bill, stressed the need for deepened engagements with critical stakeholders to glean contributions that would help in delivering a robust Tax Reform Bill.
Epia noted that the Rembinar series would broaden the scope of resource governance by integrating emerging issues such as energy transition, climate change, tax reform, beneficial ownership transparency, and contract transparency.
“These discussions have profound implications, not just for NEITI but for Nigeria as a whole, especially given the evolving governance landscape within the extractive sector.”
A panelist, Haruna Yahaya who said the new tax regime should comply with the position of the global Extractive Industries Transparency Initiative (EITI) implementation, reiterated that the tax bills have potential to simplify tax processes, enhance taxpayer transparency, reduce revenue leakages through improved enforcement mechanisms and centralize tax collection under the newly proposed Nigeria Revenue Service (NRS).
A Policy Expert on Natural Resource Governance, Mike Uzoigwe who explained that the Nigeria Revenue Service (NRS) would act as a one-stop-shop for tax collection, streamlining the process and enhancing transparency in revenue generation, called for stronger stakeholder engagement to enhance fiscal accountability, innovative digital tools to improve transparency in Nigeria’s extractive sector, and a closer collaboration between NEITI and industry players to ensure effective implementation of tax policies.
