President Bola Tinubu’s proposed tax reform bills are sparking outrage in Northern Nigeria, prompting regional groups to demand an immediate halt to the legislative process.
The plans for a legislative debate scheduled for Tuesday, 3 December 2024, for the bills which passed the second hearing on Thursday, 28 November 2024, have now been postponed after 73 lawmakers kicked against the bill.
Everything you need to know about the Tax Reform bills
The journey to the now controversial bills began in July 2024 when President Tinubu inaugurated the Presidential Fiscal Policy and Tax Reform Committee, PFPTRC.
The committee subsequently informed Nigerians of the move to replace the National Tax Policy with a more comprehensive “National Fiscal Policy on Fair Taxation, Responsible Borrowing and Sustainable Spending.”
This birthed the four bills, including the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
The proposed bills aim to ensure uniformity in tax revenue administration across Nigeria, eliminate double taxation, use taxation to encourage private sector investment in critical industries and boost disposable incomes through targeted tax exemptions.
The bills also propose a significant shift in VAT revenue distribution, allocating revenues based on the states where goods and services are most generated and consumed rather than pooling them centrally for equal redistribution.
Furthermore, the reforms suggest exempting individuals earning below the minimum wage from the Pay As You Earn (PAYE) tax. Similarly, small businesses with annual turnovers of ₦50 million or less would be exempt from paying taxes.
The proposed tax reform bills took a significant step forward on Thursday, 28 November 2024, passing their Second Reading in the Senate despite notable objections from some lawmakers.
Opposition to the bills
Tax Reform Bill debate heated 🔥
— Abdul-Aziz Na’ibi Abubakar (@jrnaib2) December 1, 2024
The first opposition to the bills was recorded on 29 October 2024, when the Northern Governors Forum, the umbrella body comprising the 19 governors of the region, kicked against the bill.
They advised the Federal Government to withdraw the bills and allow room for broader consultations among critical stakeholders, particularly the Value-Added Tax-Sharing template. The prominent contention over the bills was the sharing of Value-Added Tax as proposed, which would reduce the allocation for Northern states.
President Tinubu, however, rejected the recommendation, urging the group to allow the tax bills to continue through the legislative pathways, emphasising that ample opportunity exists for modifications.
The proposed bills have now advanced to their Second Reading in the Senate.
Opposition cause postponed legislative debate
Even the Governor of Borno state, Zulum is aware that the Presidency will have its way on the Tax Reform Bill. pic.twitter.com/wdUa5gKPY0
— Matthew (@tobbiematthew) December 1, 2024
Since its passing on 26 November 2024, intense pressure on lawmakers fuelled by the statement by Borno State Governor, Babagana Zulum, on Friday, 29 November 2024, has resulted in the postponement of the debate.
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.”
The planned legislative debate has since been called off in a memo signed by the Clerk of the House of Representatives, Dr Yahaya Danzaria, as 73 northern lawmakers kicked against the bills.
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.
Zulum also reminded the president of the role the North played in his election. He added, “Based on our understanding, this bill will destroy the North entirely. We call on President Tinubu to review this decision. He secured 60% of his votes from the North… What we need is the withdrawal of these tax bills.”
The Senate Committee on Finance has now been mandated to review the bills and report back within six weeks.
This is a developing story.
