SERAP Calls for Human Rights Assessment of Tax Reform Bills

Socio-Economic Rights and Accountability Project (SERAP) has urged Senate President Godswill Akpabio and Speaker of the House of Representatives, Tajudeen Abbas, to urgently assess the human rights impact of Nigeria’s tax reform bills currently being discussed by the National Assembly, especially on citizens living in poverty.

SERAP said, “Any discussion and consideration of the tax reform bills must ensure full compliance with provisions of the Nigerian Constitution 1999 (as amended) and the country’s international human rights obligations and commitments.”

In the letter dated December 7, 2024, by SERAP’s Deputy Director, Kolawole Oluwadare, the organisation said, “The assessments should be transparent, include public participation, and shape the provisions and measures that are ultimately passed. The outcome of any such assessments should be widely published.”

SERAP urged Akpabio and Abbas to pass “a resolution directing Mr. LateefFagbemi, SAN, the Attorney General of the Federation and Minister of Justice, to hold Nigeria’s state governors to account on their spending of trillions of naira of revenue derived from taxes, including VATs collected by their states since 2015, and to ensure the recovery of any proceeds of corruption”.

The letter told the senate and House leaders, “SERAP urges you to ensure the inclusion in the tax reform bills of transparency and accountability mechanisms to ensure that any revenue derived from taxes covered under the bills are not mismanaged, diverted or pocketed by politicians, their family members and close associates.

“SERAP notes that Nigerian authorities have the discretion to develop laws on taxation most appropriate to their circumstances.

“However, the Nigerian Constitution 1999 (as amended) and human rights and anti-corruption treaties to which the country is a state party impose limits on the discretion of the authorities in the development of any such laws.”

SERAP stressed, “Our preliminary review of the provisions of the tax reform bills shows that the bills contain some provisions that are antithetical to human rights and the rule of law.

“For example, Section 28(2)(c) of the Tax Administration bill, among others, requires financial institutions, including banks, to provide to tax authorities ‘the names, addresses, or any other information of new or existing customers.’

“Under Section 28(4), financial institutions must make ‘additional disclosure’ about their customers ‘if it is required by a notice signed by the Chief Executive Officer of the relevant tax authority.’

“These provisions, especially the phrases ‘any other information’ and ‘additional disclosure’, if implemented, could be used unjustifiably or arbitrarily to restrict the right to privacy of customers.

“The risks of violations of human rights are illustrated by the absence in the bills of sufficient safeguards against abuse of access to personal data of customers.

“The provisions also give little or no consideration to data protection, thereby increasing the risks of misuse by public authorities of a customer’s personal details, including their home address.”

SERAP added, “Another troubling provision of the tax reform bills is Section 57 of the Tax Administration bill, which grants broad, extensive, and intrusive powers to tax authorities, which may be misused to undermine Nigerians’ human rights.

“The provisions of Section 81 of the Tax Administration bill essentially oust the jurisdiction of the court in pending tax matters by stating that ‘the pendency of a legal proceeding shall not affect the performance of the duties or obligations of any taxable person under this Act or any other tax law’.

“The country also needs transparent, democratic and rights-aligned tax reforms to unlock the maximum available resources for the full realisation of human rights.”

The letter said, “Furthermore, there are credible reports that several state governors continue to divert or mismanage the revenue derived from taxes, impeding the funding of public goods and services that are crucial for the progressive realisation of human rights.

“SERAP is concerned that growing reports of corruption in the use of tax revenue and other public resources continue to disproportionately affect poor Nigerians and other most vulnerable segments of the population.

“SERAP is concerned that the opposition by some state governors against the tax reform bills may be politically motivated and reduce the tax payable to the national treasury. State governors should constructively engage in good faith in the processes to adopt a national tax system for the country.

“We would be grateful if the recommended measures are taken in the consideration of the tax reform bills.

“SERAP notes that the tax reform bills, if properly aligned with human rights standards, would enhance the ability of the federal government, states and local governments to fulfil their human rights obligations and adequately fund public services essential for human rights.

“However, without transparency and accountability, revenue derived from taxes may not be spent to combat poverty and fund development as well as provide essential public goods and services for Nigerians.

“The National Assembly has the constitutional responsibility to conduct and publish human rights impact assessments of the tax reform bills to ensure that proposed reforms best protect, advance and fulfil people’s human rights.”

The letter also told Akpabio and Abbas, “SERAP also urges you to revise and repeal several of the provisions of the bills, particularly the Tax Administration bill.

“SERAP urges you to include provisions in the tax reform bills that will ensure that Nigerians have access to all relevant data and information on fiscal policy and government revenues, including from the corporate sector.”

Members of the National Assembly are currently discussing Nigeria’s tax bills, which primarily aim to “provide uniform procedures for a consistent and efficient administration of tax laws in order to – (a) facilitate tax compliance by taxpayers; and (b) optimise tax revenue”.

 Chuks Okocha

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