Recently, Nigeria’s National Assembly — comprising the Senate and the House of Representatives — passed the Nigerian Tax Reform Bills into law. The Tax Reform Bills consist of four executive bills, namely: Nigeria Tax Administration Bill 2024 (HB-1756), Nigeria Revenue Service Establishment Bill 2024 (HB-1757), Joint Revenue Board Establishment Bill 2024 (HB-1758), and Nigeria Tax Bill 2024 (NTB 2024)(HB-1759).
Together, these four executive bills aim to overhaul the country’s revenue generation and taxation landscape by broadening the tax base, mandating disclosure of tax-relevant information, streamlining tax collection processes and harmonizing tax administration across the three tiers of government (federal, state and local government). As required by law, the freshly- minted statutes have been transmitted to the President for assent.
For non-profit organizations (NPOs) mostly operating in Nigeria as non-governmental organizations (NGOs), the new tax laws introduce both opportunities and challenges, especially in the areas of fundraising, regulatory compliance, audits, exemptions, certifications and financial reporting.
This briefer examines the provisions of the Tax Reform Bills, highlighting the implications for the nonprofit sector.
It finds that while domestic philanthropy may grow exponentially under the new tax regime, there are concerns that significant compliance burdens, stricter auditing requirements, discriminatory tax exemption criteria and policy confusion may arise from the implementation of the new policy prescriptions, potentially obstructing association rights and the ability of non-profits to operate and organize freely. Other concerns relate to legal issues such as ambiguity, interpretation, and potential conflicts with some existing national laws, constitutional provisions, and international legal frameworks Nigeria has ratified.
This briefer recommends ways non-profits can leverage new opportunities to strengthen their sustainability in uncertain economic times, while highlighting clauses requiring further policy clarifications and/or legislative review.
