By Cross Udo, Abuja
He said the decision was made for the benefit of the entire country irrespective of political affiliations and interests, adding that the NEC noted the need for sufficient alignment on the proposed reforms and recommended the withdrawal of the tax reform bill.
Makinde said: “NEC today (yesterday) took a presentation from the Chairman of the Presidential Committee on fiscal policy and tax reforms. Their main focus is fair taxation, responsible borrowing and sustainable spending.
“The Council acknowledged that the country is under-performing on all indices as regards yield from major revenue sources, also tax to GDP (Gross Domestic Products) ratio and so on.
“So, after extensive deliberation, NEC noted the need for sufficient alignment between and amongst the stakeholders for the proposed reforms.
“So, Council therefore, recommends the need to withdraw the bill currently before the National Assembly on tax reforms so that we can have wider consultations and also build consensus around these reforms for the benefit of the entire country, and to give people, for them to know the vision and where we are moving the country in terms of a tax reform, because there’s really a lot of miscommunication, misinformation.
So, the bill will be withdrawn from the National Assembly and then there will be consultations afterwards,” he said.
Recall that President Bola Tinubu and the Federal Executive Council recently endorsed new policy initiatives to streamline Nigeria’s tax administration processes.
The Federal Government said the new laws were meant to enhance efficiency and eliminate redundancies across the nation’s tax operations.
The reforms emerged after a review of existing tax laws since August 2023. The National Assembly is considering four executive bills containing these tax reform efforts.
NEC’s recommendation came days after the Northern Governors kicked against the reform bill.
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At a meeting on October 28, 2024, Governors of the 19 Northern states, under the platform of the Northern Governors’ Forum, rejected the new derivation-based model for Value-Added Tax distribution in the new tax reform bills before the National Assembly.
A communiqué read by the Chairman of the forum, Governor Muhammed Yahaya of Gombe State, said the proposition negated the interest of the North and other sub-nationals.
Meanwhile, the Presidency has explained that the proposed Tax Reform Bill was not against the north as it was going to benefit all the states of the federation.
The presidency reaction came on the heels of the communique read by Chairman of the forum, Governor Muhammed Inuwa Yahaya of Gombe State at the end of the meeting of the Northern Governors Forum, which was attended by traditional rulers from the region, led by the Sultan of Sokoto, His Eminence Muhammadu Sa’ad Abubakar III.
In a statement by Special Adviser to the President on Information and Strategy, Bayo Onanuga, the presidency said: “While we commend the Governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by the administration.
“President Tinubu and the Federal Executive Council recently endorsed new policy initiatives aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.
“These reforms emerged after an extensive review of existing tax laws. The National Assembly is considering four executive bills designed to transform and modernize Nigeria’s tax landscape.”
It added: “First is the Nigeria Tax Bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.
“Second, the Nigeria Tax Administration Bill (NTAB) proposes new rules governing the administration of all taxes in the country. Its objective is to harmonize tax administrative processes across federal, state and local jurisdictions for ease of compliance for taxpayers in all parts of the country.
“Third, the Nigeria Revenue Service (Establishment) Bill seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect the mandate of the Service as the revenue agency for the entire federation, not just the Federal Government.
“Fourth, the Joint Revenue Board Establishment Bill proposes the creation of a Joint Revenue Board to replace the Joint Tax Board, covering federal and all states’ tax authorities.
“The fourth bill also suggests establishing the Office of Tax Ombudsman under the Joint Revenue Board, which would serve as a complaint resolution body for taxpayers.”
The presidency said it was instructive to note that the proposed laws would not increase the number of taxes currently in operation. Instead, they are designed to optimize and simplify existing tax frameworks.
It said: “The tax rates or percentages will remain the same under these reforms, as they focus on ensuring a more equitable distribution of tax obligations without adding to the burden on Nigerians.
It explained that tax administration, at the moment, lacked coordination among federal, states, and local tax authorities, often resulting in overlapping responsibilities, confusion, and inefficiency. Without reform, this inefficiency will persist.
“The proposed laws aim to coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers.
“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,” it said.
The presidency added: “The proposed reforms seek to consolidate these multiple taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.
“On the proposed derivation-based VAT distribution model, which the Northern Governors oppose, it must be stressed that the new proposal, as enunciated in the Bill, is designed to create a fairer system.
“The current model for distributing VAT is based on where the tax is remitted rather than where goods and services are supplied or consumed. The ongoing tax reform seeks to correct the inherent inequity in the current derivation model as a basis for distributing VAT revenue.
“The new proposal before the National Assembly outlines a different form of derivation which considers the place of supply or consumption for relevant goods and services. This means that states in the Northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states.
“These reforms are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country.
There is no better time than now for the National Assembly to give due consideration to these bills that will overhaul our tax systems and create the revenue all the tiers of government require to fund the development our country and people urgently need.”
