By Olusegun Olanrewaju
The topsy-turvy over President Bola Tinubu’s new tax reform bills are still stoking angular reactions from all segments of Nigerian society, even as the policy arguments have maintained mainly their elitist hold.
Yesterday, the apex pan-Igbo socio-cultural organisation, Ohanaeze Ndigbo, threw its hat into the ring, backing the President in enacting the new bill into law, which passed its first reading stage on Thursday.
It’s been a bedlam since the President introduced the bill into the parliament.
While forces in the North have been blowing hot in opposing the bills, others, mainly in the South, are rooting for its signage into law.
*The bill in focus
The bill prioritises consumption location as the basis for sharing Value-Added Tax (VAT) in income generation and distribution nationwide.
The bills under consideration include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
These reforms seek to clarify the legal framework for taxes, establish a National Revenue Service, and create mechanisms like a tax tribunal and ombudsman to streamline operations and address disputes.
While backers claimed the reform would restructure the tax net and eliminate double taxation, among other things, those against it believe it would stifle the revenue streams of some businesses and state governments.
Since President Bola Tinubu’s administration sent the four tax reform bills to the National Assembly in October this year, they have recently been among the most discussed and contentious issues.
The bills are the Joint Revenue Board of Nigeria (Establishment) Bill, 2024-SB. 583; the Nigerian Revenue Service (Establishment)) Bill, 2024-SB,584; the Nigeria Tax Administration Bill, 2024-SB, 585; and the Nigeria Tax Bill, 2024-SB,586.
*Ohanaeze berates north, says Tinubu’s proposed reform will shore up economy
This was unveiled yesterday by the group’s Secretary-General, Okechukwu Isiguzoro, via a statement.
In the statement, Ohanaeze Ndigbo expressed its support for President Bola Tinubu’s administration’s tax bills, which it claimed are intended to shore up the nation’s economy.
The organisation also criticised the North over its stance on the bills.
In an emphatic statement yesterday by Isiguzoro, Ohanaeze expressed its affirmation of the progress and economic empowerment gained by the Tinubu administration.
The statement read, among others, “Ohanaeze Ndigbo, the esteemed apex socio-cultural organisation representing the Igbo nation, announces its steadfast endorsement of President Bola Tinubu’s proposed tax reform bills.
“This endorsement comes after rigorous reviews, exhaustive consultations with various stakeholders, and an in-depth analysis of the bill’s implications for the Nigerian economic landscape.
“Our comprehensive evaluation has led us to the resolute conclusion that these tax reforms are not merely legislative proposals; they represent a transformative opportunity for the rejuvenation of Small and Medium Enterprises (SMEs) and the enhancement of the fortunes of Nigerian workers.
“By eliminating the scourge of double taxation imposed by some state governors, these reforms will pave the way for an equitable business climate that significantly elevates local and foreign investment potential.
“The Igbo people, renowned for our entrepreneurial spirit and unwavering commitment to economic self-determination, stand to gain immensely from these reforms.
“The proposed measures are expected to safeguard the private sector, mainly benefiting the industrious Igbos who play a pivotal role in driving the Nigerian economy through vibrant SME activities.
“In an environment characterised by fairness and transparent regulations, we are confident that most of the benefits arising from these tax reforms will bolster our endeavours, facilitating growth and fostering robust business opportunities.”
The organisation also stated, “In light of these compelling advantages, Ohanaeze Ndigbo ardently calls upon all Southern Federal Lawmakers- both in the Senate and the House of Representatives—to unify their efforts in support of President Tinubu’s transformative restructuring program within Nigeria’s economic and fiscal sectors.
“It is imperative that our southern legislators close ranks, transcending partisan divides, to ensure that the Tax Reforms Bills successfully navigate both chambers of the National Assembly.
“We reiterate our unwavering commitment to show solidarity with President Tinubu, as we expect the South-East federal lawmakers to provide essential backing to these initiatives.
“This collective support is particularly noteworthy as it underscores our strategic alignment with the President, following our decision to abstain from nationwide protests in August 2024, a decision made in the spirit of dialogue and cooperation.
“Nonetheless, observing the substantial opposition from certain factions within Northern Nigeria regarding these critical reforms is disheartening.
“There is palpable concern that Northern governors are mobilising their forces to stifle the progression of the Tax Reforms Bills within the National Assembly, relying on their numerical predominance to assert undue influence.
“This orchestrated opposition appears driven by a desire to perpetuate the current VAT derivation principles that unjustly favour select interests at the expense of equitable national growth.
“The implications of such manoeuvres are profound. If the Northern political elites succeed in thwarting President Tinubu’s initiatives, it could set a dangerous precedent, fostering a climate of resistance against meaningful reform.”
*Zulum: Passing the tax bills into law will retard north, other regions
Borno State Governor, Prof Babagana Zulum, has said that passing the controversial tax reform bill into law before the National Assembly will have its consequences.
Speaking on Channels Television Politics Today yesterday, Zulum said the only states that will benefit from the new tax law are Lagos and Rivers states.
He pointed out that the Governors Forum had earlier advised that more consultations should be held before the bill is considered for passage but wondered why it was passed so quickly.
Emphasising his support for President Bola Tinubu, he said, “I am one of the strong supporters of the President. I was the first governor to state publicly that power should shift to the South. I know the President is very powerful. He has the power to get the bill passed into law. But passing this bill into law will have its consequences.”
Zulum said all the North was asking for was more consultations on the bill.
He explained that it was wrong to present a narrative that the North is against the bill because it would not benefit from it and stated that the only states that would benefit from the law are Rivers and Lagos.
“The northern governors are not against President Tinubu’s administration. The North cannot be against Tinubu; over 60 percent of his votes in the 2023 general elections came from the North.
“The South-East will not benefit, the South-South will not benefit, even in the South-West, only Lagos will benefit. All the money will go to Lagos and Rivers,” he further noted.
Zulum further stated that part of the new bill’s provision is that the TETFund and NASENI will be scrapped in 2029.
He said that as a lecturer, he could state that TETFund is Nigeria’s single largest agency supporting education.
“We are pleading with the President to look into this. It’s not about the North. It’s about the North, South-South, and South-East. Expunge some of the clauses and some of the portions.
“We are in a democracy. Consultation is part of democracy, and we should be able to express ourselves in it. That does not mean that I am against the President,” he said.
However, on November 28, the tax reform bills passed a second reading in the Senate.
Amid the controversies, Senate leader Opeyemi Bamidele hailed the scaling of the bill for a second reading.
The Senate Leader said there was more to be gained from the bill’s passage into law.
He also strove to explain away why people often read meanings that legislators were being used as ‘rubber stamps.’
Bamidele, representing Ekiti Central Senatorial District, noted, “In broad terms, the four bills seek to ensure uniformity in tax revenue administration in Nigeria, by the provisions of the Constitution, eliminate the incidence of double taxation across the country, deploy taxation as a tool to encourage private sector investments in critical industries and boost individual disposable incomes through targeted tax exemptions as captured in the various bills.”
However, last Thursday, Senator Ali Ndume expressed his opposition to the tax reform bills, advancing reasons why he was against them.
The senator, who represents the Borno North Central Senatorial District, criticised the timing of the bills while speaking as a guest on Channels TV Politics Today, arguing that the focus should be on governance reforms before tax reforms.
Ndume, however, outlined his concerns about the bills, citing issues such as the wrong timing, the question of derivation, Value Added Tax, and the need for more consensus or buy-in from Nigerians.
He added that the country spends over 50 per cent of its budget on recurrent expenditure and debt servicing.
“Yes, reform. But even with reforms, you have to prioritise, time it correctly, and ensure the buy-in of Nigerians because this is a democracy. It is the people’s government, for the people, and by the people,” Ndume commented.
He added, “First, we need to reform the government in Nigeria. Our personnel and overhead expenditures for 2024 are about 50 to 60 percent of the budget itself.
“We are here in November, and 20 per cent of the budget has yet to be implemented. But if you check the recurrent expenditure, it has already been exhausted.
“So, that means over N15trn to N20trn is going into personnel, debt servicing, and recurrent expenditure.
“We should reform the government, not only the Executive – we need to reform the government holistically,” he said.
The senator also raised concerns that, despite being an Executive Bill, the Senate treated it like a Presidential bill, reinforcing the perception of a rubber-stamp Senate.
“Does it say it’s a Presidential Bill, or is it supposed to be a Presidential Bill? When you say it’s an Executive Bill, and you don’t have the buy-in of the Executive of the State, is it complete? That is where the problem lies. We’ve been doing this to the point that they now call us a rubber stamp.”
The North’s anger at the bills vented its frustration at the weekend when some youth groups allegedly attacked deputy senate president Barau Jibrin, alleging conspiracy to work against northern interests.
“We wish to inform you that the Northern Youth Assembly is highly disappointed in you and your cohorts for accepting to be engaged to destroy the North and its future.
“We are committed to fighting this course with our last drop of blood and to expose you and your likes, who are ready to auction the North and its future, as we could no longer trust and surrender our destiny into the hands of political merchants, betrayers, and political hypocrites.
“The proposed Tinubu Tax Reform Bill is evil, and that was the reason the National Economic Advisory Council and Northern governors rejected the bill in the first place, while people like you are trying to justify what is wrong in its totality to cash on the situation for some cheap political gain.
“We wish to finally advise you to change your ways before the entire people in the North, old and young, children and women, are mobilised to place their curse on you,” a youth leader said.
*The flipside: Shehu Sani
On the other hand, Shehu Sani, a former senator who represented Kaduna Central in the National Assembly, criticised the opposition, urging leaders to thoroughly review the bills rather than “blindly opposing” them.
In a statement, Sani emphasised that the reforms are designed to decentralise tax benefits and bring greater economic fairness.
In his words, “There is a provision where companies will pay value-added tax to the host state instead of sending it to a single account. This approach is beneficial and fair to all regions.”
According to him, the bills aim to harmonise tax administration, curb corruption linked to tax waivers granted to influential business figures, and modernise revenue generation systems.
“This reform requires a courageous leader to dismantle the old, inefficient tax structure and address the influence of business cabals who avoid tax payments and seek waivers.”
The senator advised state governors to engage consultants for a detailed review of the reforms if needed.
*Other stakeholders
Opinions on these bills, whose proponents argued would lift the tax burden on 90 percent of Nigerian workers, simplify the tax landscape, reduce the burden on small businesses, and streamline tax collection in the country when fully operational, are as diverse, divided, and divisive.
Contributing, a representative of the Lagos State Government who echoed the same sentiments at a conference held by the Commerce and Industry Correspondents Association of Nigeria (CICAN) in Lagos recently, lauded the legislation.
The Special Adviser to the Lagos State government on Public Private Partnerships, Bukola Odoe, said she believed that enhancing tax collection processes boosts revenue generation, contributes to sustainable economic progress, and supports the realisation of national economic targets.
At the event, represented by Adefisoye Adekunle, a Consultant and Financial Analyst at the Lagos State Office of Public-Private Partnerships, Odoe argued that optimising the tax collection process has become imperative for achieving the federal government’s $1 trillion economy target by 2030.
While stressing the need for a balanced approach to tax collection, Odoe said, “We need to focus and optimise our collection process, make it simpler, make it easier in such a way that people with a small Android phone can access it. You should be able to access your tax records and pay without any stress.”
Throwing her total weight behind the bills, Odoe emphasised the pivotal role of infrastructure sustainability in facilitating tax reforms, advocating for the automation of revenue collection processes in Nigeria to improve effectiveness and transparency. ted.
Also, the Chief Executive Officer (CEO) of Mallinson & Partners Ltd, Afam Mallinson Ukatu, stated that businesses are always ready to pay once such taxes are fair and not stifling.
While calling for more investments in the non-metallic mining sector of the Manufacturers Association of Nigeria (MAN) since it can lift the country out of its present economic quagmires, Afam, the former Chairman of the Non-Metallic and Mineral Products Sectoral Group/Council Member of MAN, however, urged the Federal Government to urgently rework the policies of the sector, which has gone obsolete to make it more investment-friendly and attractive.
Afam would also want the government to look into the issue of multiple taxation and how it is administered.
