Nigeria's lower house of parliament passed four tax reform bills proposed by President Bola Tinubu on Thursday, marking progress in the government's efforts to overhaul the country's tax system, but several proposed measures were watered down.
Nigeria, Africa's most populous country, has one of the world's lowest tax-to-GDP ratios, at 10.8%, forcing the government to rely on borrowing to fund the budget.
After ending costly subsidies and twice devaluing the naira currency in his first year in office, Tinubu has shifted his focus to reforming the tax system to boost revenue and efficiency.
The new tax system seeks to raise value-added tax (VAT) to 12.5% by 2026, streamline tax collection and overhaul revenue-sharing between federal and state governments.
But lawmakers retained VAT at 7.5%, rejecting the original proposal, and excluded minimum-wage earners from income tax to ease the tax burden on lower-income earners.