The Peering Advocacy and Advancement Centre in Africa (PAACA) has emphasized the need for post-reform monitoring mechanisms to ensure accountability in Nigeria’s ongoing tax reform efforts.
Speaking on the sidelines of the public hearing on the tax reform bill at the House of Representatives, PAACA’s Executive Director, Ezenwa Nwagwu, stressed that tax reforms should prioritize national interest over political or regional rivalries.
Nwagwu reaffirmed PAACA’s support for the proposed tax reforms, describing them as a significant step toward a fairer and more efficient taxation framework.
He noted that the reforms aim to boost revenue generation while preventing undue financial strain on businesses and individuals.
“A well-balanced tax system is key to national development, and it is imperative that these reforms are approached with a collective, non-partisan mindset,” Nwagwu stated.
A major point of contention in the tax reform bill is the proposed adjustments to the Value Added Tax (VAT) sharing formula. Some stakeholders have raised concerns about the Derivation Principle, arguing that it may disproportionately benefit economically vibrant states while leaving less industrialized regions at a disadvantage.
However, PAACA sees the reforms as an opportunity for nationwide economic expansion.
“The bill has the potential to encourage economic activities and job creation in underdeveloped regions, thereby increasing their VAT earnings in the long run,” Nwagwu explained
He urged stakeholders to view the reform as a means to stimulate broader economic participation rather than as a policy that would favor only certain regions.
Beyond supporting the reforms, PAACA strongly advocates for a structured post-reform monitoring system to track progress, identify implementation challenges, and ensure continuous improvements.
According to Nwagwu, establishing a framework to assess the effectiveness of the new tax policies will allow for necessary adjustments and prevent unintended negative consequences.
Additionally, PAACA urged the government to prioritize transparency and public accountability in the implementation of the tax reforms. Nwagwu stressed that clear communication and responsible governance are essential to building public trust and encouraging taxpayer compliance.
