Senate Passes Landmark Tax Reform Bills For Second Reading Despite Stakeholder Concerns

The Senate at plenary on Thursday, passed the four tax reform bills for second reading, ignoring suggestions for its withdrawal for wider consultations.

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

The red chamber had earlier held a one-hour closed session where the federal lawmakers agreed to debate the general principles of the bills.

The Senate Leader Opeyemi Bamidele read the lead debate when the closed session ended.

Bamidele said the bills should be seen as part of the required legislative intervention to support ongoing fiscal and tax reform measures needed to reposition the Nigerian economy for growth and productivity.

He said “These bills should be considered with great sense of patriotism and exercise of the powers of the National Assembly under section 59 of the Constitution regarding imposition of taxes.

“I therefore urge my distinguished colleagues to support these Bills for second reading.”

When the floor was opened to the senators who wanted to contribute, the senator representing Bayelsa West, Seriake Dickson, commended the executive for coming up with the landmark tax reform bills.

He said the fiscal legislation would entrench fiscal federalism in Nigeria if passed into law.

He noted that Nigerians were paying tax and the government at various levels have been using it to carry out developmental projects since the colonial era.

He said the situation changed when oil was discovered and the sub regional government started relying on the federal government for federal allocation.

He noted that some stakeholders objected to the bill because there was no proper consultation.

Dickson said: “The position of the Nigeria Governors’ Forum is legitimate. The executive should carry out more enlightenment on the bills.

“The derivation is meant to encourage governors to be more productive. The proposed bills would enable states to boost revenue by creating enabling environment that could encourage investment.

“When companies are established in their states, the Pay As You Earn taxes that would be collected from workers of those companies will be paid to the state government.

“As a federalist, which I’ve been all my adult life, I see these bills as a move towards entrenching fiscal federalism in Nigeria, which I fully support.

“I use this opportunity to call on all my colleagues to agree that these bills, all four of them, should be passed for second reading to enable our committee and the experts and the general public engage in accordance with our rules.

“The tax reform bills when passed to law, will entrench fiscal federalism in Nigeria.”

However, Senator Ali Ndume, representing Borno South in the Senate, argued that the bills should be withdrawn for proper consultation in order to get the buy-in of the critical stakeholders who are opposed to it.

Ndume stressed the need for broader consensus and questioned the timing of their introduction.

He urged the Senate to consider the sensitivities of the moment, by adopting a more strategic approach to avoid backlash.

Ndume then advocated that the bills be temporarily withdrawn to allow for more consultation with state governors, the National Economic Council (NEC), and traditional rulers.

He emphasised that the reforms would be more effective if they had the buy-in of the critical stakeholders, suggesting that swift passage could occur after such consultations.

Ndume said: “Let it be on record that my problem with the bills is the timing. Number two is the issue of derivation.

“The issue of derivation made the reform contagious, contaminated, and contradictory in some cases.

“This is because the constitution has to be amended in order for some of these proposals to be effective. I’m glad we are doing a constitutional review. So even if it means reviewing the constitution.

“I agree that we should not throw away the baby with the bathwater. I would have preferred we remove the baby and throw away the water first. And that is to go with what the governors and NEC proposed.

“The bills should be withdrawn and re-presented to the National Assembly again after getting the buy-in of the governors and NEC and even our traditional rulers.

“Let’s be honest with ourselves. If we sit down here, work on these bills, assuming as it is now, there may be a backlash.

“This is because the governors have not come out publicly to change their position, the traditional rulers have not sat down publicly to change their position. NEC have not sat down to change their position.

“As for me, I believe the bill contains so many good things, but these two things, derivation and VAT should be looked into.

“Even though you say it will be addressed at the public session, it’s not something that many of us will agree to it.

“You started by saying, we are going to negotiate, which is good. Why don’t we negotiate first before we come out to take a position?

“The people through the governors and then and the traditional rulers say that the bills should be withdrawn, make some necessary amendments and then bring it back and we can pass it in 24 hours. That is my position.”

Ndume’s position was instantly countered by the Senate Chief Whip, Senator Tahir Monguno, who said the views of the stakeholders who are opposed to the bills could be taken at the public hearing after the legislation had passed second reading.

Monguno said in the course of public hearing, the governors and traditional rulers are free to ventilate their opinions.

He said Ndume’s position is strange to the legislative process and mere academic exercise.

Monguno, who is from Borno State like Ndume, lamented why Ndume, who was minority leader in the House of Reps, a leader in the Senate, and immediate Chief of the Senate with all the cognate experience of lawmaking should come up with such arguments.

He said: “I get to disagree with you that this bill should be withdrawn first and consultation should be held with the Nigeria Governors’ Forum and traditional rulers.

“We have a procedure which is clearly and unambiguously stated in our rulebook for the process of lawmaking and the Constitution, in a very clear and unambiguous manner, gave us the power to regulate our proceedings.

“Section 60. And pursuant to Section 60 of the 1999 Constitution as amended, we gave these rules to ourselves in order to guide our proceedings.

“The process of lawmaking is very clear and unambiguous as per this book. That second reading, it will be now transmitted to the Committee for Public Hearing.

“In the course of the public hearing, Nigerians of all walks of life, of all groups, will come and aggregate, including the governors and traditional rulers. They are free to come and ventilate their opinion.

“With due respect, what Senator Ndume has suggested is foreign to process of legislation exercise and therefore is merely academic and should not be considered.

“My contribution is that these bills as being proposed, particularly removing VAT on pharmaceutical and education is pro-people, will go long way in removing tax burdens on Nigerians.  I support that these bills should go for second reading.”

President of the Senate, Godswill Akpabio, who presided over the plenary, put the question on whether the senators would want the bills passed or not and the lawmakers overwhelmingly voted in support.

The Chairman, Senate Committee on Finance, Sani Musa (APC Niger East), fully supported the bill.

Akpabio therefore mandated the Senate Committee on Finance,  to organise public hearings on the bill for inputs from those against the bills like the governors’ forum, National Economic Council (NEC), Northern Elders ‘ Forum ( NEF ) et cetera and report back within six weeks .

Sunday Aborisade

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