NESG Calls for Urgent Amendments to Tax Law, PIA, and Electricity Act
Business Environment at Risk as NESG Seeks Legislative Reforms
The Nigeria Economic Summit Group (NESG) has called on the National Assembly to urgently amend key economic laws, including the Nigeria Tax Act 2015, the Petroleum Industry Act (PIA), and the Electricity Act 2023, to strengthen Nigeria’s business environment and attract investment. The recommendation follows the presentation of a policy reform brief in Abuja.
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Push for Legislative Reforms
NESG’s proposal forms part of a broader strategy to address structural bottlenecks limiting private sector growth. The policy document, developed by the Ernest Shonekan Centre for Legislative Reforms and Economic Development, outlines priority legislative actions needed to enhance economic competitiveness.
The group stressed that outdated or misaligned provisions across key laws continue to create inefficiencies, increase compliance costs, and discourage investment.
Tax Act: Addressing Gaps for Businesses
A major focus of the reform call is the Nigeria Tax Act 2015. NESG highlighted inconsistencies in the definition of small businesses, urging alignment with provisions in the Companies and Allied Matters Act (CAMA).
The group noted that small and medium-sized enterprises (MSMEs) play a critical role in Nigeria’s economy, contributing significantly to GDP, employment, and exports.
NESG also recommended amendments to allow businesses to deduct foreign currency expenses at official exchange rates, a move aimed at improving cost recovery and reducing financial strain on firms operating in a volatile FX environment.
Additionally, concerns were raised about compliance costs and data privacy risks linked to digital tax systems, particularly for smaller businesses.
Energy Sector Reforms: PIA and Electricity Act
The NESG emphasised that reforms are also needed in the energy sector to unlock investment and improve efficiency.
On the Electricity Act 2023, the group called for stronger collaboration between distribution companies and state governments to create a more investor-friendly ecosystem.
It noted that state-level regulatory frameworks must support returns on investment and reduce operational uncertainty in the power sector.
Similarly, the Petroleum Industry Act requires adjustments to address implementation challenges and align with evolving market realities.
Broader Legislative Priorities
Beyond the three core laws, NESG identified several additional frameworks requiring urgent review, including:
Nigerian Oil and Gas Content Development Act
Environmental Impact Assessment Act
Gas Flaring Prohibition and Punishment framework
Banks and Other Financial Institutions Act (BOFIA)
These reforms, according to NESG, are essential to create a cohesive and predictable regulatory environment for investors.
Implications for Investment and Growth
The call for amendments reflects growing concerns within Nigeria’s private sector about regulatory fragmentation and policy uncertainty. Investors continue to face challenges related to inconsistent legal definitions, high compliance costs, and operational risks across key sectors.
By addressing these issues, policymakers could improve ease of doing business, stimulate private capital inflows, and support long-term economic growth.
Outlook: Reform as a Catalyst for Competitiveness
NESG’s recommendations highlight the critical role of legislative reform in shaping Nigeria’s economic trajectory. As global competition for investment intensifies, aligning legal frameworks with international best practices will be essential.
The NESG’s push for amendments to the Tax Act, PIA, and Electricity Act underscores the urgency of reforming Nigeria’s legal and regulatory architecture. Effective implementation of these recommendations could enhance investor confidence, reduce business costs, and position Nigeria for more sustainable economic growth.
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