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Tax Reform Bill: VAT As a Consumption Tax

People have been talking about the proposed bill, discussing its potential, the concerns, and the necessary changes it could bring to Nigeria’s tax system. The Tax Reform Bill, with its proposed shift in the VAT derivation formula, is no small matter. The reform has the power to reshape Nigeria’s tax system and, by extension, its economy. It promises to address long-standing issues within Nigeria’s tax structure, with a focus on making the VAT distribution process more equitable for all regions.

During a recent session at the House of Representatives on the proposed tax reform bills, Dr. Zacch Adedeji, Executive Chairman, Federal Inland Revenue Service (FIRS), presented an insightful case for restructuring the Value Added Tax (VAT) derivation formula. His explanation highlighted both the advantages of the reform. The Tax Boss explained that VAT is fundamentally a consumption tax, and as such, it should…
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