States of the federation were split over the controversial Tax Reform Bills before the National Assembly. While some are in support, many are against it entirely, while others are kicking against some sections. A number of states said they are still studying the bills to take a stand.
The division among the states came as the Presidency debunked insinuations that the Tax Reform Bills will make Lagos or Rivers more affluent and impoverish Northern states; and Small Business Owners of Nigeria, ASBON, Dr Femi Egbesola, backed the move, noting that it’s small business friendly.
States that are in support of the tax reform include Kogi, Benue, Delta and Ekiti
Those against include Borno, Nasarawa and Kano.
Anambra, many South-South states and Plateau said they are still studying the document.
Meanwhile, South-South Leader, Chief Edwin Clark has warned that if not properly handled, the move will create more problems for the country.
This was as Abia North Senator, Orji Kalu criticised the Federal Government for failing to involve key stakeholders in the ongoing discussions over the proposed tax reform bills with Senator Seriake Dickson (PDP, Bayelsa West), expressing confidence that the Tax Reform Bills will become law despite opposition from some quarters.
Tax Reform Bill won’t impoverish North — Presidency
Stating that the bills will not impoverish the North, the Presidency via a statement by Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, described the insinuation as reckless, maintaining that the bills will not destroy the economy of any section of the country.
Expressing worry over different interpretations by some political actors, the statement noted: “Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.
“Unfortunately, most reactions are not grounded in facts, reality, or sufficient knowledge of the bills. While some commentators have attempted to incite the people against lawmakers, others have polarized one section of the country against another.
“The tax reform bills will not make Lagos or Rivers more affluent than other parts of the country, as recklessly canvassed, poorer. The bills will not destroy the economy of any section of the country. Instead, they aim to enhance the quality of life of Nigerians, especially the disadvantaged, who are trying to make a living.”
Continuing, the Presidency said: “Contrary to the lies being peddled, the bills do not suggest that NASENI, TETFUND, and NITDA will cease to exist in 2029 after the passage of the bills.
“Government agencies such as NASENI, TETFUND, and NITDA are funded through budgetary provisions with company income tax and other taxes paid by the same businesses that are being overburdened with special taxes.
“One reason President Bola Tinubu embarked on the Tax and Fiscal Policy Reforms is the need to streamline tax administration in Nigeria and make the operating environment conducive for businesses.
“For decades, businesses, investors, and private sector players in Nigeria have complained of being overburdened by a myriad of taxes and levies, including those earmarked to fund various government agencies and initiatives.
“The multiple taxes complicate the economic environment, making Nigeria uncompetitive for investment and preventing many businesses from growing or continuing their operations. Some companies have had to make the rational decision to relocate to other countries. We cannot continue on this path or wait for 20 years if this country is to deliver the prosperity we need for our people.
“The proposal, as contained in section 59(3) of the Nigeria Tax Bill, only seeks to consolidate some of the earmarked taxes imposed on companies and replace them with a single tax to be shared with key agencies as beneficiaries in a phased manner until 2030.
“The time frame offers ample opportunity for affected agencies to explore other funding sources in addition to budgetary allocations in line with the constitution and international best practices.
“It is a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it. None of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.”
It said that government imposes major taxes, be it income tax, consumption tax, or other taxes, to channel resources to its areas of priority at the time.
According to the statement, “imposing a separate tax to fund an agency is an aberration that is yet to yield results despite the huge burden on businesses. The tax bill seeks to address this problem.
“Relevant stakeholders and public analysts owe it a duty to properly educate themselves about the bills’ contents and avoid misleading the public for any reason.”
“We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
“In a period like this, when our people across the country look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, leaders should be more measured in their public utterances to avoid heating the polity and polarising the country unduly.”
The Presidency said President Tinubu welcomes the public interest the bills have generated.
“He encourages leaders across the country, including governors, traditional rulers, civil society activists, students, trade associations, professional associations, and the general public, to take advantage of the Public Hearings that the National Assembly will organise to present their views on how best to reform our taxes and fiscal regime.
“What is never in doubt is the imperative of changing the existing tax laws and administration that have become obsolete and unhelpful in achieving the growth and development we desire for our country.”
Tinubu can pass tax bills but Nigerians will bear consequences – Zulum
However, Governor Babagana Zulum of Borno State, who has been against the bills cautioned that although President Tinubu has the executive power to push through the reform, doing so could have significant consequences for millions of Nigerians.
Speaking during an appearance on Channels Television Politics Today on Sunday, Zulum had said: “We know the power of the president. I’m a system man, I respect him.
“If the president wants to use his power to pass the tax bill, he may have his way, but it has its consequences on the people.”
Zulum also stated that only Lagos and Rivers will benefit from the new tax scheme, adding that the North is merely asking for more time to consult and fully understand the bills.
He said, “On this tax issue, there are a lot of misconceptions. At NEC (National Economic Council), we advised the Federal Government to pause for a moment in order to have deeper consultations with stakeholders.
“We felt that the VAT provision in the tax law, which clearly stated that VAT allocation should be based on derivation further stated that 60 per cent of the VAT tax will be shared based on derivation.
“I’m not an economist but based on the calculations that we did, only Lagos and Rivers states will benefit from this scheme. We did our own research and concluded that we would lose.
“The matter is: why are we in a rush? We advise the Federal Government to take a pause and remove some of the clauses in the tax bill that are inimical to the growth and development of not only Northern Nigeria but South-East and South-South will be severely affected.
“We are in a democracy. We should understand the nitty-gritty of this tax regime. This is our bone of contention.”
We’re against VAT sharing formula —Sule
On his part, Governor Abdullahi Sule of Nasarawa State said that he and other colleagues from the North are not against President Tinubu but the VAT sharing formula being proposed.
“We picked an item in that bill and that item is concerning VAT. We are talking about the sharing formula of the VAT. We have a right to agree or disagree with this.
“What we said clearly is that we want fairness in the distribution of VAT. If we go the way it is, we are going to say it will be unfair to some other states in the South.” Sule insisted.
Governor Sule, also chairman of the APC Northern Governors Forum, said he has also met with federal legislators from the state on the need to support his stand on the VAT sharing formula.
He averred that President Tinubu may not fully understand the harm the proposed reform may bring on the citizenry, noting that if he does, he would not support the entire bill because he may not want Nigerians to go through the pains associated with the implementation.
Sule described the tax reform bill as another hardship that would be inflicted on Nigerians if enforced, not only on the North but the entire nation.
Kano Assembly Rejects Bills
In Kano, the House of Assembly, yesterday, rejected the tax reform bills following deliberations at its plenary session presided over by Speaker Ismail Jibrin Falgore.
The majority leader of the House and member representing Dala Constituency, Lawan Husseini, in a motion of urgent public importance presented the need for northern lawmakers and the Conference of Speakers not to allow the bill to see the light of the day.
According to him, “the bill, when passed into law, will not be in favour and betterment of the people in the North, as such, the actions of the Senate to pass it is condemnable.
“We view it as a calculated plan to sabotage the economy and even increase hardship and impoverish the region in general.
“The pattern or arrangement in that law to allocate VAT is worrisome because some states will suffer and states like Lagos would take major share of that collection because most of the headquarters of Nigerian banks, telecommunications companies, Dangote and BUA as well as other multinationals are situated in Lagos. So, 80 per cent of the VAT collected in Nigeria will be to Lagos and its environs whereas some other states in Northern Nigeria will take a minimal share.”
The Member representing Doguwa constituency, Salisu Mohammed, and the Member representing Garko constituency, Murtala Kadage supported the motion.
Delta, Benue, Kogi back bills
However, Delta, Kogi and Benue state governments are in support of the bills.
Delta State Commissioner for Economic Planning, Mr. Sunny Ekedayen said: “We will support anything that will further the interests and development of the country; and anything that will enhance further and deepen development. “
In Benue, the Commissioner for Finance, Budget, and Economic Planning, Mr. Michael Oglegba, expressed the state’s backing for the Federal Government’s effort to enhance revenue through taxation, saying: “The Tax Reform Bill is largely a good bill. We support the effort of the Federal Government to grow tax revenues.”
In Kogi the Ministry of Finance, Budget, and Economic Planning organized a one-day citizens’ engagement and interactive session on the Tax Reform Bills.
The state Commissioner for Finance, Budget, and Economic Planning, Idris Asiru, stated that the initiative is to foster collaboration between government and citizens, ensuring that the voices of the people are heard in the formulation of the bills, and demonstrates the government’s commitment to transparency, accountability, and inclusive governance under the administration of Governor Usman Ododo.
Asiru encouraged citizens to participate in the ongoing consultation process, stating that the collaborative approach will ensure that the final bills reflect the needs and aspirations of Kogi people.
Chairman of the Kogi State Internal Revenue Service, Sule Enehe explained that the proposed tax reform bills are designed to streamline tax administration, reduce the burden on low-income earners, and promote economic growth.
Speaking at the programme, the National Deputy Publicity Secretary of the All Progressives Congress, APC, Hon. Duro Meseko, expressed the party’s support for President Tinubu and his economic policies.
Stand of South-South states
The South-South states may not be against the tax reforms bill given the region’s age-long agitation for fiscal federalism.
In Bayelsa State, the Commissioner for Information, Orientation & Strategy, Mrs. Ebiuwou Koku-Obiyai said she will have to get in touch with the governor, who is on leave, for the state’s position.
But a top official of the government, who spoke anonymously said: “There is nothing wrong with the tax reforms bill before the National Assembly. I think what the President Tinubu-led Federal Government is trying to to do is to introduce true fiscal federalism through the back door which is good for the country.”
In Cross River State, the Chief Press Secretary to the Governor, Nsa Gill said: “On the surface, we are in tandem with the tax reform bill. We are with the president but as a state we are still studying the 24-page document.”
The Commissioner for information, Dr. Erasmus Ekpang, said: “We know there are one or two complaints, we have also seen so many areas that favour our dear state, but we need ample time to study the document properly before taking a position on the bill.”
In Rivers State, the government said it is not in a hurry to comment on the bills.
The Commissioner for Information and Communication, Joe Johnson said he was yet to have the opportunity of studying the bill and therefore could not speak on the matter yet.
In Akwa Ibom, a senior government official said: “What’s the hurry? A bill is a process. We won’t delight in media debate. When it is thrown to public scrutiny, Akwa Ibom State Government will air its views and input through the appropriate channel.”
However, the senator representing Akwa Ibom North West Senatorial District, Dr Ekong Sampson, assured that current tax reforms, when passed into law, would benefit Akwa Ibom State in a number of ways.
He said: “In respect of the Reform Bill, there are areas of profound interest to Akwa Ibom State. For instance, why should oil companies operate on our shores but pay their tax elsewhere?
“The Senate will subject the Tax Reform Bill to full public enquiry. I assure that the Senate will spare no effort to ensure that Akwa Ibom has its inputs into the bill. I will make sure that Akwa Ibom’s interest is protected and this reflects the opinion of the senators from Akwa Ibom State, including Godswill Akpabio, the Senate President who is our leader, to ensure that Akwa Ibom interest is protected as the Senate will subject the bill to full public enquiry.”
Edo govt mum on new tax policy
In Edo State, there was no official response from the state government. A very top senior official volunteered: “You know this is a policy matter, the governor must be consulted, he was a senator before becoming governor but he needs to study the situation very well before responding. “
Plateau begins the discussion, to support bills if favourable to citizens
In Plateau, the government has started the discussion on the controversial bills, saying the reform would be supported if it adds value to the Plateau people.
The State Commissioner for Information and Communication, Musa Ashoms said: “Anything that will plunge our people into hardship will not be a welcome development. If the reform will be beneficial to our people, we will key into it, but if it will further stretch our people into more hardship, we will join our voice to say no to it. Our government is pro-people and advocates for things that will advance the development and welfare of the people.
“We’ll look into the matter; we just had an interface with our legislators irrespective of political parties; the tax reform will be supported if it is meant to favour our people.”
Ekiti backs tax reform, faults committee on consultation
The Ekiti State Government threw its weight behind the tax reform bills but lamented inadequate consultation by the presidential committee
In a chat with Vanguard, the Commissioner for Finance and Chairman, Forum of State Commissioners for Finance in Nigeria, Akintunde Oyebode, faulted the Chairman of Presidential Committee on Fiscal Reform and Tax Reform, Taiwo Oyedele, for not consulting state governors and commissioners before going to the Senate.
His words: “I agree that our tax laws are in need of reform. This law is a century old because it was handed over to us by the colonial administration. The question about reform is undeniable. The reform has various levels of engagement and I think the committee also did a bit of engagement but they could have done more by exposing the draft bill to governors, and commissioners forum before it went to the National Assembly for consideration.”
Oyo has no position yet — CPS
The Chief Press Secretary to Governor ‘Seyi Makinde of Oyo State, Dr. Sulaimon Olanrewaju, said that the state government currently has no official stance on the controversial tax reform bills. However, he said that the state government will continue to monitor the developments surrounding the bills and engage in discussions with relevant authorities when necessary.
Move is small-business friendly — ASBON
Speaking on the issue, President of the Association of Small Business Owners of Nigeria, ASBON, Dr Femi Egbesola, expressed the full support of micro, small and medium enterprises (MSMEs) operators for the proposed tax reform bills.
His words: “We in the MSME ecosystem strongly support the proposed tax reform bill. It’s pro-poor and small business friendly.
“Exemptions of low income earners and small businesses with N50 million or less annual turnover from tax is highly welcomed.
“We also appreciate the exemptions of many products, foods and agriculture, medicals, transportation etc from the VAT list.
“We believe this will strengthen the purchasing power and disposable income of the average Nigerians, leading to lower prices, lower inflation rate, more jobs and higher competitiveness of our products and services. Taxing the rich to support the poor and vulnerable is the global standard, bringing about fairness and equality.
“The idea of the central point of filing, paying and dispute resolution, the creation of the tax ombudsman, the disintegration of the former tax structures to create new and sustainable structures, the equity distribution of government tax revenues and VAT among the federal government and the sub-nationals, with larger percentage accruable to states generating bigger tax incomes, the harmonization of the many taxes, and more, are all great answers to our age long prayers.”
Most governors complaining over revenue sharing’re lazy — Shinkafi
Backing the move, Executive Director of Patriots for Advancement of Peace and Social Development, Dr. Sani Shinkafi, criticised some state governors for their resistance to the proposed tax reform bills, describing them as “lazy” and unwilling to develop strategies to generate internal revenue.
“Because the monies are going to be shared based on performance and contribution that is why they are complaining. Most of these states are lazy, most of them are not ready to develop their states to generate revenue, that is why they are complaining,” he said.
Speaking during an interview with Arise News, Shinkafi strongly defended the contentious tax reform bills and described the attack by the Northern Youth Assembly as uncalled for.
If not properly handled, more problems will be created — Clark
Sharing his thoughts, Chief E.K. Clark said: “The issue of tax reform bills sent to the National Assembly by President Tinubu is a very serious matter because if not properly handled they will bring in some problems, which will be uncalled for. There are issues like restructuring that must first be handled. Is the President ready for restructuring now, must we allow the Hausa/ Fulani and the Yoruba to dictate the tune?
“When talking about tax reforms, is it a matter between the North and the West? Let me warn that Nigerians are no longer ready to sit down and watch the legacies their forefathers left behind to perish. I will soon speak in an elaborate way on the tax reform bills.
“We must not allow arrogance, corruption, ethnic,religion to destroy our country. Managing diversity has been our problem and where one person comes to power, he will suddenly realize that his people have been forgotten and that he has arrived. We should know that no part of the country is better than others and at my age, 97 going to 98 years, I do not know what is happening in my country. Are we slaves in our country? Enough is Enough.”
FG erred on process— Orji Kalu
On his part, Senator Orji Kalu criticised the Federal Government
In an interview with Arise Television, Kalu argued that the government made a “mistake” by not consulting NEC, the NSGF, and the Council of State before introducing the bills.
He, however, said that the bills are “very progressive” and would bring back “fiscal federalism” in Nigeria.
He said: “As I told you before, the bill is very progressive. It will bring back fiscal federalism. Many senators have not been briefed. I think the Federal Government made a mistake. The initiators of the bills could have briefed the National Economic Council, Governors’ forum and Council of state.”
The lawmaker said that the president has no plans to introduce Alpha Beta, a consulting firm, as Nigeria’s tax consultant.
Kalu added that Nigeria’s tax laws are obsolete and need to be revamped for the nation to progress.
“One of my friends called me and said the President, Bola Tinubu, wants to put another Alpha Beta in Nigeria like he did in Lagos State.That is not the issue. The issue is that we need to make amendments to our obsolete laws.”
No state stands disadvantaged — Jimbo
A member of the House of Representatives, Clement Jimbo representing Abak/Etim Ekpo/Ika Federal Constituency, expressed support for the tax reform, stating that it will benefit all states in Nigeria.
In an interview with Vanguard, the lawmaker argued that the current tax system favours Lagos State, but the new bill will decentralize tax collection, allowing states where products are consumed to benefit.
According to him, the bill also proposes the inclusion of the digital economy and special tax officers to resolve disputes quickly.
Opposition won’t stop passage — Dickson
Meanwhile, the Chairman, Senate Committee on Ecology and Climate Change, Seriake Dickson (PDP, Bayelsa West, has expressed confidence that the Tax Reform Bills will become law despite opposition from some quarters.
Dickson, in an interview with journalists in Abuja, yesterday, said the bills in question are not substantially different from the Petroleum Industry Act, PIA, which was passed despite misgivings from certain quarters.
Dickson however urged persons or groups who had an issue with any of the bills to take advantage of the proposed public hearing to make their point.
According to him, if the National Assembly could pass the PIA containing 3% statutory fees payable to the host communities despite the Niger Delta leaders’ insistence on 10% as recommended in the executive bill, chances are that the tax reform bills may receive equal treatment.
The three per cent fee is Operating Expenses or Expenditure (OPEX) of the previous year being remitted to host communities by oil companies as stipulated in the PIA 2021.
He noted that the late president Umaru Musa Yar’adua, proposed 10% for the host communities but the National Assembly passed 3 per cent after about two decades.
Dickson said: “The Senate has passed the bills for second reading. Public hearings will take place and people should get ready to present their positions. The tax bill is a law like every other law and it has to go through the normal legislative process.
“Right now, taxes from Bayelsa State are paid to Lagos State and I don’t want that to continue.
“When there is consumption of any good or services from any state it should be calculated and paid to that state.”
It’s opportunity for North to develop —Dogara
Former Speaker of the House of Representatives, Yakubu Dogara, has urged Northerners not to oppose the proposed Tax Reforms Bills, saying it is an opportunity for the region to aggregate wealth and develop economically.
Dogara spoke on Channels Tv’s Special Town Hall On Tax Reform Bills, yesterday.
The former Speaker said rather than mounting opposition against the bills, leaders from the North should identify areas that could be corrected.
His words: “I agree that as lofty as the ideals of these bills are, as lofty as its provisions are, there may still be problems with it. Of course some have pointed it out and it can be discussed. If we put on the cap of leadership, we can discuss that. It should not be that because of those things the bill cannot pass. They have talked about the distribution formula which is the major thing orchestrating all the cries, especially in our region in the North.
“As long as you are attributing this to the locations where these goods are consumed, not where the headquarters of the companies producing the goods are located, I am 100 per cent for it. You know why? Because whether we like it or not, the discussion about economic justice will not end today. As Northerners, we should embrace this opportunity to aggregate wealth, build our people, and ensure prosperity for them. They have also said the word derivative isn’t defined in the Act. I have told them that if it is so, they should define it. It should not stop work on these bills in the National Assembly.”
Over centralisation of power responsible for tax reform controversy – Agbakoba
Former President of Nigerian Bar Association, NBA, Dr Olisa Agbakoba, SAN, has attributed the ongoing controversy and opposition of the proposed Tax Reform Bills to over centralisation of power in the hands of the Federal Government.
Agbakoba who stated this in a statement yesterday also called for the devolution of power across the three tiers of government, stressing that concentration of power with the Federal Government explained the opposition faced by the Tax Reform Bill.
Agbakoba, while admitting that the bill is beneficial from a revenue generation perspective, suggested balanced governance and equitable resource allocation for development to thrive.
