President Tinubu Declines NEC’s Call to Withdraw Tax Reform Bills, Supports Legislative Process

President Bola Tinubu on Friday, reacted to the National Economic Council’s (NEC) recommendation during its meeting on Thursday at the State House, Abuja, that the four tax reform bills already sent to the National Assembly be withdrawn for further consultation.

The President, according to a statement issued by his Adviser on Information and Strategy,  Bayo Onanuga, while commending the NEC members, especially Vice President Kashim Shettima and the 36 State Governors, for their advice, however, believed that the legislative process, which has already begun, provides an opportunity for inputs and necessary changes without withdrawing the bills from the National Assembly.

The development emerged as a notable Northern group, the Arewa Think Tank (ATT) threw its weight behind the tax reform bill before the National Assembly, insisting that it was not targeted at the 19 northern States, as being wrongly speculated in the north. 

The four bills are the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill and the Joint Revenue Board Establishment Bill.

While urging the NEC to allow the process to take its full course, Tinubu in the statement, welcomed further consultations and engagement with key stakeholders to address any reservations about the bills while the National Assembly considers them for passage.

The statement further explained that when Tinubu set up the Presidential Committee on Tax and Fiscal Policy Reform in August 2023, he had only one objective: to reposition the economy for better productivity and efficiency and make the operating environment for investment and businesses more conducive.

This objective, it stressed, remains more critical even today than ever before.

The Committee worked for over a year and received inputs from various segments of society across the geopolitical zones, including trade associations, professional bodies, different Ministries and Government Agencies, Governors, traders, students, business owners, and the organised private sector.

The tax reform bills that emerged were distilled from the extensive work of the Presidential Committee.

The tax bills before the National Assembly aim to streamline Nigeria’s tax administration processes, completely overhaul the nation’s tax operations, and align them with global best practices.

Onanuga also listed major highlights of the four Bills to include: The Nigeria Tax Bill: This Bill seeks to eliminate multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.

The Nigeria Tax Administration Bill (NTAB): This Bill 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 to ease taxpayers’ compliance and enhance the revenue for all tiers of government.

The Nigeria Revenue Service (Establishment) Bill: The Bill seeks to re-establish the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect its mandate as the revenue agency for the entire federation, not just the Federal Government.

The Joint Revenue Board Establishment Bill: This Bill proposes creating a Joint Revenue Board to replace the Joint Tax Board, covering federal and all state tax authorities. The fourth bill will also establish the Office of Tax Ombudsman under the Joint Revenue Board, protecting taxpayers’ interests and facilitating dispute resolution.

The bills’ overarching objective, the release stated, is to effectively coordinate federal, state, and local tax authorities, thereby eliminating the overlapping responsibilities, confusion, and inefficiency that have plagued tax administration in Nigeria for decades. 

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 proposed reforms seek to consolidate these numerous taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.

While there may be differences in approach or specific provisions of the new tax bills, what is not in contention is the need to review the tax laws and how we administer them to serve nation’s overall national development agenda.

The statement further pointed out that Tinubu would continue to respect and welcome the advice and recommendations of NEC, an essential constitutional organ of government on economic matters.

Meanwhile, the Arewa Think Tank (ATT) has thrown its weight behind the Tax Reform Bill before the National Assembly.

This was just as it defended Tinubu on the allegations that the recent power outage in Northern Nigeria was a deliberate attempt to sabotage the region’s economy.

In a statement, the Convener of ATT, Muhammad Alhaji Yakubu, said his group aligned with Tinubu on the Reforms, while urging for further wider consultation to build a consensus around the Reforms. 

“It is unfortunate that wrong speculations are going around that the Reform is against the north. 

We wish to disagree that the tax reform bill before the National Assembly is targeted at the 19 northern States. 

“We are calling on the governors of the 19 Northern states to go back to the drawing board to have a rethink over their outright rejection of the bill, especially the proposed amendment to the distribution of Value Added Tax (VAT) to a derivation-based model. 

“We believe that, as stated in the bill, is designed to create a fairer system that will benefit all the States across the country. 

“We know that the ongoing tax reform seeks to correct the inequity in the current derivation model as a basis for distributing VAT revenue. 

“We commend the Northern governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we however, consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by Tinubu’s administration. 

“We are of the knowledge that the new policy initiatives are aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations. 

“We also know that the reforms being proposed are critical to improving the lives of Nigerians and are not proposed by President Tinubu to undermine any part of the country,” the statement added.

On the issue of conspiracy theories around the power outage in the north, the group said the negative insinuations were the handwork of some Nigerians with ulterior motives to pitch Tinubu’s administration against northern interests. 

“If truly the federal government wants to cripple the North, will it be looking for a loan to complete Maradi-Kano rail lines, which is of immense economic benefit to the North? 

“If it is true that Tinubu wants to cripple the economic activities of the North, let’s look at the students loan; statistics have shown that majority of the beneficiaries of that loan are northern students. 

“And look at the Almajiri Commission that Mr. President is funding properly now. Who are the beneficiaries? It is the Northerners. 

“We are appealing to some disgruntled politicians not to politicize this power outage. Where President Tinubu deserves kudos, we should give him kudos. 

“If there are issues, especially those who have access to him, they should meet him and trash out issues. We should not politicise everything. 

“The North is benefiting from the government of President Tinubu. We should give him kudos. We are still appealing for more time for him. By May next year, if God spares our lives, we can give objective assessment of his government so far.”

Deji Elumoye and Sunday Ehigiator

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