The tax reforms bills imbroglio continued on Thursday with the National Economic Council (NEC) asking President Bola Tinubu to suspend action and withdraw the bills in question from the National Assembly in order to carry out a ‘wide consultation’ on them.
Governor Seyi Makinde of Oyo State, who disclosed this after the 144th meeting of the National Economic Council at the State House, Abuja, added that this was part of the resolutions and decisions taken during the meeting.
He added that the council members agreed that there is a need to allow for consensus building and proper understanding of the bills by Nigerians.
‘NEC noted the need for sufficient alignment on the proposed reforms and recommended the withdrawal of the tax reform bills.
We saw the gap and decided that there is a need for a wide consultation’ he said.
Recall that the 19 Northern Governors had met on October 28, 2024, and declared opposition to the bills. They specifically rejected the new derivation-based model for Value-Added Tax distribution in the new bills.
The northern governors in a communiqué that was read out by their chairman, Governor Muhammed Yahaya of Gombe State, said what is contained in the proposed bills negates the interest of the North and other sub-nationals.
The presidency has however said the bills will positively affect all the 36 states and harmonize the country’s tax laws for greater efficiency while submitting that talks about people losing their jobs and the perceived marginalization of the North have no foundation.
The president’s Special Adviser on Information and Strategy, Mr Bayo Onanuga, argued in a statement he issued on Thursday which was titled ‘Explainer: Proposed tax reform bills not against the north; they will benefit all states’ that the bills will actually be advantageous to everyone.
‘It is instructive to note that these proposed laws will not increase the number of taxes currently in operation. Instead, they are designed to optimize and simplify existing tax frameworks.
The tax rates or percentages will remain the same under these reforms, as they focus on ensuring a more equitable distribution of tax obligations without adding to the burden on Nigerians.
The reforms will not lead to job loss. On the contrary, they are structured to stimulate new avenues for job creation by supporting a dynamic, growth-oriented economy. Importantly, these laws will not absorb or eliminate the duties of any existing department, agency, or ministry. Instead, they aim to harmonize revenue collection and administration across the federation to ensure efficiency and cooperation’ he said.
The presidency added that the nation’s existing tax administration lacks coordination among federal, state, and local tax authorities, often resulting in overlapping responsibilities, confusion, and inefficiency, the proposed laws will therefore help to ‘coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers’.
It was noted that under the existing laws, taxes like Company Income Tax, Personal Income Tax, Capital Gains Tax, Petroleum Profits Tax, Tertiary Education Tax, Value-Added Tax, and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.
‘The proposed reforms seek to consolidate these multiple taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation’ Onanuga added.
Specifically commenting on the proposed derivation-based VAT distribution model, which the Northern Governors have opposed, the presidency insisted that ‘the new proposal, as enunciated in the Bill, is designed to create a fairer system’.
‘The ongoing tax reform seeks to correct the inherent inequity in the current derivation model as a basis for distributing VAT revenue.
The new proposal before the National Assembly outlines a different form of derivation which considers the place of supply or consumption for relevant goods and services.
This means that states in the Northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states.
There is no better time than now for the National Assembly to give due consideration to these bills that will overhaul our tax systems and create the revenue all the tiers of government require to fund the development our country and people urgently need’ the statement submitted.
Team@orientactualmags.com also learned that the senate and the House of Representatives broke with tradition on Thursday by surprisingly adjourning and suspending plenary sessions for 20 days.
This was unexpected being a period during which the president is expected to send the 2025 budget proposal and other related documents to the legislature.
It was believed that this was as a result of the controversy that has trailed the tax reform bills.
Recall that the Senate had on Wednesday listed the bills on its order paper for first reading but later paused action on them.
The Senate President, Barrister Godswill Akpabio after the consideration of the report on the bill seeking for Act for establishment of University of Agriculture and Tropical Studies , Iragbiji , Osun State, on Thursday announced adjournment of plenary sessions until November 19, 2024, for oversight and committee engagements.
The controversial tax reform bills are;
The Nigeria Tax Bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.
The Nigeria Tax Administration Bill which proposes new rules governing the administration of all taxes in the country. Its objective is to harmonize tax administrative processes across federal, state and local jurisdictions for ease of compliance for taxpayers in all parts of the country.
The Nigeria Revenue Service (Establishment) Bill which seeks to rename the Federal Inland Revenue Service as the Nigeria Revenue Service to better reflect the mandate of the Service as the revenue agency for the entire federation, not just the Federal Government.
The Joint Revenue Board Establishment Bill which proposes the creation of a Joint Revenue Board to replace the Joint Tax Board, covering those in charge of tax matters at the federal and state levels. It also suggests the establishment of the Office of Tax Ombudsman under the Joint Revenue Board, serving as a complaint resolution body for the taxpayers-Team@orientactualmags.com Do you have any information you wish to share with us? Do you want us to cover your event or programme? Kindly send SMS to 08059100286, 09094171980 or get in touch via orientactualmag@gmail.com. Thank you.
