Withdraw tax reform bills from NASS, NEC tells Tinubu

ABUJA – THE National Economic Council, NEC, yesterday, bowed to pressure from many stakeholders, especially from the north, and asked President Bola Tinubu to immediately withdraw the Tax Reform Bills from the National Assembly to allow for wider consultations and consensus building.It also recommended the inclusion of the South East and South-South in the construction of dams to serve as speed bumps along the highway.Oyo State Governor, Seyi Makinde, disclosed the call for withdrawal of the tax reform bills while briefing State House correspondents at the end of the 144th NEC meeting chaired by Vice President Kashim Shettima at the Council Chamber, Presidential Villa, Abuja.

Makinde explained that the council members, in their recommendation, agreed that it was necessary to allow for consensus building and understanding of the bills among Nigerians.

NEC’s plea was made as the Presidency explained that the proposed tax reform was not against the North and that it would benefit all states of the federation.

Need for sufficient alignment, consensus
Makinde further stated that NEC noted the need for sufficient alignment on the proposed reforms and recommended the withdrawal of the tax reform bill.

His words: “NEC today (yesterday) took a presentation from the Chairman of the Presidential Committee on fiscal policy and tax reforms. Their main focus is fair taxation, responsible borrowing and sustainable spending.

“The Council acknowledged that the country is underperforming on all indices as regards yield from major revenue sources, also tax to GDP (Gross Domestic Products) ratio and so on.

“So, after extensive deliberation, NEC noted the need for sufficient alignment between and amongst the stakeholders for the proposed reforms.

, Council, therefore, recommends the need to withdraw the bill currently before the National Assembly on tax reforms so that we can have wider consultations and also build consensus around these reforms for the benefit of the entire country, and also to give people time to know the vision and where we are moving the country in terms of a tax reform because there’s really a lot of miscommunication and misinformation., the bill will be withdrawn from the National Assembly and then there will be consultations afterwards.”

President Tinubu and the Federal Executive Council, FEC, recently endorsed new policy initiatives to streamline Nigeria’s tax administration processes, saying the new laws are meant to enhance efficiency and eliminate redundancies across the nation’s tax operations.

The reforms emerged after a review of existing tax laws since August 2023. The National Assembly is considering four executive bills containing these tax reform efforts.

Northern governors, leaders’ opposition
NEC’s recommendation came days after northern governors, traditional rulers and opinion leaders in the region kicked against the reform bills.At a meeting on October 28, 2024, governors of the 19 northern states, under the platform of the Northern Governors’ Forum, and monarchs, led by the Sultan of Sokoto, Mohammed Sa’ad Abubakar 111, rejected the new derivation-based model for Value-Added Tax, VAT, distribution in the new tax reform bills before the National Assembly.

A communiqué read by chairman of the forum and governor of Gombe State, Muhammed Yahaya, said the proposition negated the interest of the north and other sub-nationals.

NEC recommends inclusion of S-East, S-South in construction of dams
NEC also recommended inclusion of the South East and South-South in the construction of dams to serve as speed bumps along the highway.

It equally directed the ministry of Water Resources and sanitation to commence a comprehensive integrity review of the state of Nigeria’s waterways and dams in a step to mitigate the ravaging impact of flooding.

The governor of Anambra State, Professor Chukwuma Soludo, who disclosed this while briefing State House correspondents at the end of the council meeting, said the Minister of Water Resources and Sanitation, Professor Joseph Utsev, had briefed members of NEC on the federal government’s intervention activities across the country regarding the impact of this year’s flooding which has become a major national disaster.The water resources ministry had earlier identified 148 local government areas in the country, spanning 31 states, as high flood risk areas for 2024, beginning from April to November.

According to him, after receiving the presentation from the minister, NEC resolved that the federal ministry of water resources and sanitation should conduct an integrity review of all the waterways and dams across the country.

He said: “There was serious emphasis on the need for a massive programme of dredging of the waterways. The council also urged governors who have not submitted their reports on the situation of flooding and management in their states to do so immediately.

“Council also noted that the Green Climate Fund should have an infrastructure resilient fund component and it was also noted that there are some critical parts of the country that are very massively ravaged by this flooding, particularly the South East/South South, that are completely omitted in the ongoing programs of the construction of dams, at least to act as speed bumps along the highways, particularly in the River Niger.”

Professor Soludo also said the council considered the national emergency and the responses on the damages and the coordination taking place between states and the federal government and outlined further steps that should be takenTo date, about 34 states have been affected, 217 local governments, 1,374, 557 persons already affected. And 740, 743 persons were displaced nationwide and 321 persons dead 2,0845 injured, with 250,800 cultivated farmlands also destroyed, affected by the rapid flood,”

Tax reform not against the North —Presidency
Meanwhile, the Presidency has explained that the proposed Tax Reform Bill was not against the north or any part of the country.

Rather, it said the reform is going to benefit all the states of the federation.

In a statement issued by Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, yesterday, the presidency said: “While we commend the Governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by the administration.

“President Tinubu and the Federal Executive Council recently endorsed new policy initiatives aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.

These reforms emerged after an extensive review of existing tax laws. The National Assembly is considering four executive bills designed to transform and modernise Nigeria’s tax landscape.”

Continuing, it said: “First is 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.

“Second, the Nigeria Tax Administration Bill (NTAB) proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions for ease of compliance for taxpayers in all parts of the country.

“Third, the Nigeria Revenue Service (Establishment) Bill seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect the mandate of the Service as the revenue agency for the entire federation, not just the Federal Government.

“Fourth, the Joint Revenue Board Establishment Bill proposes the creation of a Joint Revenue Board to replace the Joint Tax Board, covering federal and all states’ tax authorities.

The fourth bill also suggests establishing the Office of Tax Ombudsman under the Joint Revenue Board, which would serve as a complaint resolution body for taxpayers.”

Reforms won’t increase number of taxes
The presidency said it was instructive to note that the proposed laws would not increase the number of taxes currently in operation. Instead, they are designed to optimise and simplify existing tax frameworks.

It said: “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 losses. 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 harmonise revenue collection and administration across the federation to ensure efficiency and cooperation.”

It explained that at the moment, “tax administration lacked coordination among federal, state, and local tax authorities, often resulting in overlapping responsibilities, confusion, and inefficiency. Without reform, this inefficiency will persist. The proposed laws aim to coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers.

Under existing laws, taxes like Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), Value-Added Tax (VAT), and other taxing provisions in numerous laws are administered separately with individual legislative frameworks.”

The presidency added: “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.

“On the proposed derivation-based VAT distribution model, which the Northern Governors oppose, it must be stressed that the new proposal, as enunciated in the Bill, is designed to create a fairer system.

“The current model for distributing VAT is based on where the tax is remitted rather than where goods and services are supplied or consumed. 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.

These reforms are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country. 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.

Source :Vanguard