Tax reform, students and tax practitioners

 Nigeria’s ongoing tax reform efforts have sparked significant debate, particularly concerning students and tax practitioners.

Tax Reform Overview

On May 9, 2025, Nigeria’s Senate passed four key tax reform bills aimed at increasing government revenue and improving fiscal efficiency. These bills propose raising the Value Added Tax (VAT) from 7.5% to 12.5% starting next year and include amendments to Nigeria’s oil law, transferring fiscal duties like royalty and petroleum profit tax collection to the new Nigeria Revenue Service. Despite facing criticism and resistance from members of President Bola Tinubu’s All Progressives Congress, especially over fears of worsening the country’s economic hardship, the Senate’s approval is a key victory for the administration. The House of Representatives had passed the bills in March, and both chambers must now reconcile their versions before forwarding them to President Tinubu for final approval. 

Students’ Concerns

Student groups have expressed strong opposition to the proposed tax reforms, citing potential adverse effects on education and regional development. The Muslim Students’ Society of Nigeria (MSSN) called for deeper stakeholder engagement, emphasizing the need for tax policies that are fair, inclusive, and considerate of the economic realities faced by Nigerians, especially students, young entrepreneurs, and small businesses. Similarly, the Students’ Wing of the Coalition of Northern Groups (CNG-SW) commenced protests against the proposed Tax Reform Bill, describing it as a significant threat to education and development in Northern Nigeria. They highlighted concerns about the adverse impact on organizations like the Tertiary Education Trust Fund (TETFund) and the National Information Technology Development Agency (NITDA), which have been instrumental in supporting education and innovation. Lecturers and academic staff unions, such as the Colleges of Education Academic Staff Union (COEASU), also fear that the proposed tax reforms may disrupt infrastructure financing in public tertiary institutions. They expressed concerns that alterations to education tax collection and allocation could undermine the development of public tertiary education in Nigeria. 

Tax Practitioners’ Perspectives

The Chartered Institute of Taxation of Nigeria (CITN) has expressed confidence that the Federal Government’s tax reform initiatives will enhance revenue generation and improve the overall taxation system in the country. CITN President Samuel Agbeluyi emphasized that the proposed reforms signal positive developments for Nigeria’s fiscal landscape, aiming to introduce much-needed orderliness in the practice and administration of taxation across the country. 

Regional Disparities and Political Tensions

The proposed tax reforms have also intensified regional disparities, particularly between Northern and Southern Nigeria. Northern leaders argue that the reforms favor southern states, exacerbating the historic north-south divide. The bill suggests changing the VAT distribution method, which opponents claim will disadvantage the more populous but economically poorer northern states. The Arewa Consultative Forum (ACF), a Northern Nigerian socio-political group, reviewed the tax reform bills and submitted recommendations to the National Assembly, focusing on VAT, TETFund, and NITDA. The group expressed concerns that the bills could disproportionately impact the North and called for broader consultations to address these issues. 

Next Step

The tax reform bills have passed the House of Representatives and the Senate. Both chambers must now reconcile their versions before forwarding them to President Tinubu for final approval. Given the significant opposition from various stakeholders, including students, academic staff unions, and regional groups, the National Assembly may need to address these concerns to ensure a more inclusive and equitable tax reform process.