Faced with stiff opposition from lawmakers and 19 northern state governors, the House of Representatives has suspended indefinitely the debate on the Tax Reforms Bills earlier fixed for Tuesday
By Emma Ogbuehi
Faced with stiff opposition from lawmakers and 19 northern state governors, the House of Representatives has suspended indefinitely the debate on the Tax Reforms Bills earlier fixed for Tuesday
The planned debate was called off in a memo signed by the Clerk of the House of Representatives, Dr Yahaya Danzaria. 73 northern lawmakers have kicked against the bills, according to the PUNCH.
Those who rejected the bills include 48 Reps members from the North-East, 24 federal lawmakers from Kano and a former Governor of Sokoto State, Senator Aminu Tambuwal, who represents Sokoto South Senatorial District.
The memo suspending the debate dated November 30, 2024 is titled, ‘Rescheduling of Special Session on Tax Reform Bills.’
It read, “I am directed by the House leadership to inform all Honourable Members that the special session, initially scheduled for Tuesday, December 3, 2024, to discuss all the tax reform bills, has been postponed to a later date.
“This rescheduling is due to the need for further and broader consultations with all relevant stakeholders. A new date and venue for the session will be communicated in due course. We regret any inconvenience this may cause and appreciate your understanding.”
A leaked video of the closed-door session of the Green Chamber reportedly showed the North-East lawmakers in tense debates against the tax reform bills.
The footage shows the member representing Damboa/Gwoza/Chibok Federal Constituency, Borno State, saying, “On behalf of the 48 honourable members from the ravaged North-East sub-region, I want to first of all rely on the position of the three previous caucus leaders. In addition to this, the primary responsibility of every government is simply the welfare of its citizens.
“North-East, even before the insurgency, was the poorest region in Nigeria. Today, our people have been turned into beggars. Billionaires and millionaires of yesterday have to queue up in IDP camps in host communities to collect 10kg bags of rice.
“If other parts of the country were in our shoes, even this sitting would not be possible. We have concluded that we are going to make further consultations because there is nothing that is cast in stone.”
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President Bola Tinubu, had on September 3, 2024, transmitted four tax reforms bills to the National Assembly for consideration following the recommendations of the Taiwo Oyedele-led Presidential Committee on Fiscal and Tax Reforms.
The bills include the Nigeria Tax Bill 2024, which aims to provide the fiscal framework for taxation in the country, and the Tax Administration Bill, which will provide a clear and concise legal framework for all taxes in the country and reduce disputes.
Others are the Nigeria Revenue Service Establishment Bill, expected to repeal the Federal Inland Revenue Service Act and establish the Nigeria Revenue Service as well as the Joint Revenue Board Establishment Bill, which will create a tax tribunal and a tax ombudsman.
On October 29, 2024, the Northern Governors Forum, the umbrella body comprising the 19 governors of the region, kicked against the bill, particularly the Value Added Tax-sharing template.
At a gathering in Kaduna, the governors directed federal lawmakers from their respective states to vote against the bills when they came up for debate in both chambers of the National Assembly.
Two days later, the National Economic Council presided over by Vice President Kashim Shettima advised the Federal Government to withdraw the bills to create room for broader consultations among critical stakeholders, a counsel turned down by the President in a statement by his spokesman, Bayo Onanuga.
In response, politicians from the North, including Borno State Governor, Babagana Zulum, insisted that the bills would further hurt the economic development of the region.
Zulum was quoted in an interview with BBC as saying, “Why the rush? The Petroleum Industry Bill took almost 20 years before it was finally passed. But this tax reform bill is being transmitted and receiving legislative attention within a week. It should be treated carefully and with caution so that even after our exit, our children will reap its benefits.
“We condemn these bills sent to the National Assembly. They will drag the North backwards and also affect the South East, South West, and some South-Western states like Oyo, Osun, Ekiti, and Ondo.”
Zulum further clarified that he was not an enemy of President Tinubu’s administration, but insisted that if the four tax bills were passed into law, only one of the 36 states – Lagos – would be the major beneficiary.
He said, “I am a strong member of the APC. If you are to count two governors who have been in support of Tinubu from 2019 to 2023, you can mention Prof Zulum. I was the first governor to come out publicly to say that power must go to the South.
“I am not an economist. But based on the calculations we did, only Lagos will benefit from, this scheme. However, we have had a series of consultation with the FIRS team and had a meeting with the tax team of Lagos State. Lagos told me that they will lose a lot if this implemented. They said ‘We did our research and concluded we will lose.’
“Then why are we in a rush? Not only in Northern Nigeria, the Southeast, South-South and even the Southwest will be severely affected. Only Lagos will benefit from this scheme. But what we are telling them is to give us time. Why are we in a rush? Let us pause and do deeper consultation because we are in a democracy.
24 federal lawmakers from Kano State are also said to have rejected the tax bills. The decision was adopted during a state caucus meeting on Sunday chaired by the Kano State Deputy Governor, Aminu Gwarzo, and attended by many state representatives.
A former governor of Sokoto State, Senator Aminu Tambuwal, similarly thumbed down the bills. Tambuwal made his position known during the distribution of relief materials to victims of flooding as well as handing over starter packs to over one thousand beneficiaries of skills acquisition in his senatorial district on Sunday. He condemned the timing of the bill, which he said was wrong and not in tune with the demands of the citizens.
“I believe this is a wrong time for any upward review of either VAT or any form of tax, the time is inauspicious, the time is very wrong. These are hard times for the people of Nigeria and what they are going through. What we require of the government is for it to focus on projects and programmes that will bring succour and relief to the people and not increase their hardship.
“Already, we are facing the hardship occasioned by the devaluation of the naira and removal of fuel subsidy that was done by this regime. I believe we should focus on managing the hardship and see how we can bring our people out of hardship.
“The recent statistics of National Bureau of Statistics shows that over 30 million Nigerians are already in abject poverty.”
In line with the position of the northern leaders, the Coalition of Northern Groups, Gombe State chapter, expressed strong opposition to the proposed tax reform bills, citing concerns that it may exacerbate regional disparities and negatively impact the economic well-being of the northern region.
In a statement signed by the state coordinator, Muhammad Deba, on Saturday, the group stated, “The new VAT regime could further widen the economic gap between the North and South. This could lead to social unrest, migration, and other negative consequences.
“The government has not provided sufficient data and analysis to justify the proposed changes to the VAT sharing formula. Without transparent and evidence-based decision-making, the potential negative impacts of the reform cannot be accurately assessed.”
Down south, Special Adviser to the Oyo State Governor on Media, Sulaimon Olanrewaju, on Sunday, disclosed that the state government fully backed the National Economic Council’s position on the controversial tax bills.
Notwithstanding, the pan-Yoruba socio-political organisation, Afenifere, however, threw its weight behind the controversial bills.
The group, which disagreed with some other socio-cultural groups in the country, argued that Tinubu meant well for the country with the bills, which have passed the second reading in the Senate.
The Organising Secretary of the group, Abagun Omololu, explained that the bills had potential economic benefits for all regions, including the northern region.
The Middle Belt Forum (MBF) National President, Bitrus Pogu, said the bills should be subjected to scrutiny by experts to enable Nigerians have a better understanding of the issues at stake.
“When an aspect of something is being considered rather than the holistic view, you are likely to land into a problem and that is the issue with those opposed to the tax reforms bills.
“The problem they are having is the aspect of revenue sharing, which the bills seem to have tried to make commensurate with revenue generation. I think that is where the problem is. We in Nigeria like to enjoy benefits and reap where we didn’t show. All of us have been depending on oil for all these years. This oil is a depleting resource but it is coming from somewhere,” he stated.
The Senate had last week, approved the second reading of the tax reform bills. The proposed bills aim to revise the sharing formula for Value Added Tax (VAT), ensuring states receive a larger share based on consumption within their territories. Additionally, they seek to exempt essential goods and services such as education, healthcare, transportation, and accommodation from VAT to ease the financial burden on low-income earners.
Senator Ali Ndume (Borno South), has been vocal in rejecting the bills.