See also  Sacked Kano SSG threatens to expose Kwankwaso, Governor Abba Kabir Yusuf
You are currently viewing Reps and politics of tax reform bills

Reps and politics of tax reform bills

Spread the love


From Ndubuisi Orji, Abuja

When President Bola Tinubu transmitted four executive bills, intended to reform tax administration to the National Assembly, on October 3, it was taken for granted that the bills will be passed in matter of days, by the House of Representatives.

The reason is simple. The House has always be beholden to the Executive. Since, the inception of the present administration, the Presidency has always gotten whatever it wants from the parliament with dispatch.

However, with the four tax reform bills, which include the Joint Revenue Board of Nigeria (Establishment) Bill, 2024, The Nigeria Revenue Service (Establishment) Bill, 2024, The Nigeria Tax Administration Bill, 2024 -and the Nigeria Tax Bill, 2024, it has become a different kettle of fish.

The tax reforms bills, since their transmission to the National Assembly have been trailed by controversy. First, the National Economic Council ( NEC), after a meeting, called for a pause to allow for further consultation. The NEC which is chaired by the Vice President, Kashim Shettima, has governors of the 36 states as members.

Also, northern leaders,including Governor Babagana Zulum and the Northern Elders Forum( NEF), have also kicked against the proposed legislations, arguing that it is skewed against the North. However, the Presidency has continued to push for the bills.

Three weeks ago, the Senate passed the tax bills for second reading and referred them to its Committee on Finance for further legislative action. However, the bills have been stalled in the Green chamber, owing to stiff opposition by members of the northern caucus.

Contentious provisions

The controversy trailing the tax reform bills stems principally from the proposed increase in the Value Added Tax ( VAT) and the distribution of revenue to the states.

For instance, Section 146 of the Nigeria Tax Bill provides for an increase in VAT from the current 7.5 percent to 10 percent in 2025, 12 . 5 percent in 2026- 2029 and 15 percent in 2030.

Also, Section 77 of the Tax administration bills states that revenue accruing from VAT shall be distributed on to the three tiers of government as follows: Federal Government- 10 percent; state government- 55 percent and local government 35 percent, “ provided that 60 percent of the amount standing to the credit of states and local governments shall be distributed among them on the basis of derivation.”

However, this provision, especially Section 77 of Tax Administration Bill, has not gone down well with Northern leaders, who believe it will affect the region adversely.

The League of Northern Democrats(LND), a political pressure group consisting of eminent Northern politicians, in its technical report on the tax bills, says the proposed increase in VAT seems hasty and would impose more hardship on the people.

The LND, which is led by former Kano Governor, Ibrahim Shekarau, in the report, which was presented in Abuja last Thursday, noted that “records indicate that VAT was introduced at the rate of 5% in 1993, and was revised to 7.5% in 2020, a 2.5% increase after 27 years.

“The proposal to increase VAT rate to 10% after only Four years appears too quick and hasty. This has the potential to exacerbate the current burden on households through direct increases in prices in a period of sustained high inflation.

See also  Why Atiku, Obi May Halt Saturday's Governorship Polls

“This long-term plan for periodic increment in VAT rate is clearly unscientific apart from being technically unpredictable. Appropriate VAT rate should be determined by the economic situation in that period.”

Politics of geography

The tax reform bills , which has kept the parliament on the edge, since they were transmitted, have polarised the House into North/ South divide. At least on three occasions, in the last three weeks, the issue was a source of rancour in the Green Chamber.

In one occasion, members of the House, shouted down the chairman, House Committee on Media and Public Affairs, Akin Rotimi, for what they considered a subtle attempt to push for the tax bills.

Rotimi, while proposing a motion for the consideration of reports of the House Committee on Nigerian Content Development and Monitoring, on behalf of the chairman, , Boma Goodhead, had said he is from Ekiti, “the first state whose National Assembly caucus has unanimously endorse the tax bills.”

Immediately, the members shouted him down, as the House erupted in protest, with members shouting no. No. The speaker, Tajudeen Abbas, in a bid to calm frayed nerves, cautioned Rotimi to stick to the subject matter.

Abbas said “Mr Rotimi, you know this is a controversial issue. I don’t want you to be mentioning things that are not relevant to the subject matter. On your behalf, I withdraw that statement that you have made.” But aggrieved members were not swayed even after the spokesman retracted his words.

Also, same day, a New Nigeria Peoples Party ( NNPP) member from Kano, Ghali Mustapha Tijani, while speaking under matters of privilege, asked for the resignation of the deputy spokesman of the House, Philip Agbese, for allegedly misrepresenting issues with respect to members position on the tax bills.

The week before, the House had gone into an executive session as part of efforts to build consensus around the bills, preparatory for their second reading where the general principles will be debated. However, the session did not yield the desired fruits as some of the northern members pointedly told the leadership that the bills are against their people.

Analysts say the three incidents reflects the disposition of members, especially those from the Northern part of the country to the tax reform bills. Amid rising tension, the leadership suspended deliberations on the bills, in the Green chamber to enable more consultations by members.

Tijani, who represents Albasu/ Gaya/Ajingi Federal Constituency of Kano State, told journalists, in Abuja, that the tax reform bills came at the wrong time. According to the lawmaker, the bills, if passed into law, will impact negatively on the masses, especially as regards the payment of Value Added Tax ( VAT).

According to him, “the four bills, to me, came at the wrong time. For simple reason, the policies of the current government have not helped the Nigerian poor. Similarly, there are two major areas of concern, the derivation as well as the increase in the VAT system.

“You see, if you take the VAT, Section 146 talked about the increase in the VAT from 7.5% to 10% to 12% and to 15% by 2030. And nobody will tell you that this will not be transferred to the final consumer. No matter what, yes, you have talked about exemption, exemption for some certain cadre or scale or income, but the final consumer or the companies will transfer the VAT or the tax to the final consumer.”

See also  Okocha emerges as new chairman

Tijani, who wondered why the government is pushing for the hasty passage of the tax bills, said the proposed legislations should be jettisoned all together.

“The Executive should understand that this bill is generating serious concern, serious issue. I can tell you, if this bill is being implemented, the current problem we have today will multiply. The bills, I think, are not debatable. They should be completely discarded or put aside.”

Daily Sun gathered that the Executive, as well as the proponents of the tax bills in the House, have stepped up efforts to woo those opposed to the proposed legislations, so that whenever it comes up for second reading, it will have a smooth sail.

Two week ago, the Southern caucus in the House, openly expressed support for the bills, stating that they are open for dialogue. The chairman of the caucus, Nicholas Mutu, who disclosed this at a press briefing, in Abuja, said the Southern lawmakers have met over the bills and are in support of them.

Mutu said “ The southern caucus of the House of Representatives has met. We welcome the bills and are we are open to dialogue. “

The lawmaker added that “we are open to dialogue. And at the right time, we will capture the people elements that is missing in the bill. The bill is good for Nigeria and it is people oriented bill. And we are happy to have the bill.”

The chairman of the Bayelsa State caucus, in the House, Fred Agbedi, who also spoke at the briefing noted that there is no division in the House over the bills.

According to him” Mr President has sent Executive Bills , what the Southern caucus is saying is that we are ready to take up our official responsibility of making laws for the nation. We welcome the bills and that as we process them, inputs are made from our various states and Constituencies.

“Some states have already received those inputs. So we are in consonant with our constituents and the states that we represent. So we are ready to work to ensure that we give a better tax law to Nigerians. That is what is what we are interested in.  There is nothing like Southern or Northern divide.”

Like host communities fund, like tax bills

The controversy trailing the tax reform bills, is reminiscent of what obtained in the House in the 9th assembly with respect to the Host Communities fund provided in the Petroleum Industry Act (PIA).

The Host Community Fund, which is part of the key provisions of the PIA, had generated controversy prior to the passage of the Act. The House had recommended 5 percent as Host Fund, while the Senate settled for 3 percent. However, a conference committee of both chambers adopted 3 percent.

See also  Just in: Senate sacks Chief Whip Monguno

The development sparked a row in the Green chamber, with Southern lawmakers, who stated that it was against the interest of their people, staging a walk out, after protesting on the floor of the House. Regardless, the parliament eventually adopted 3 percent as Host Community Fund.

For the chairman, House Committee on Defence, Babajimi Benson, there is nothing unusual about the reaction to the proposed legislations on tax reforms.Benson, who represents Ikorodu Federal Constituency, recalls that similar controversies had trailed the 13 per cent derivation fund for oil-producing state, as well as the host community fund in the Petroleum Industry Act (PIA).

“At every point in time, there’s no bill that has a national outlook that there won’t be interest colliding one way or the other. Our job is to sit down with our brothers, find the middle course and move ahead, “ he stated.

Inside sources say the House leadership is working a tight rope over the tax reform bills. It was gathered that why the leadership does not have issues slating the bills for second reading, it is been careful to ensure, it does not incur the wrath of majority of members over the proposed legislations.

Besides, there are fears that if the bills are slated for second reading without adequate consultations, it might scale through. In recent times, several bills had been killed on the floor, when they came up for second reading.

For instance, recently, the House has rejected at least three bills, members felt strongly against. They include a bill seeking for rotation of governorship and presidential seats among the constituent part of a state and the country respectively, as well as a bill seeking to make it compulsory for a presidential candidate to secure more than 50 percent of votes in a election to be declared winner.

Ironically, both bills which were sponsored by Ikeagwuono Ugochinyere and 32 others, and Awaji–Inombek Abiante were rejected even before the sponsors had the opportunity to lead debates on them. 

Similarly, another bill seeking to raise the educational qualifications for persons seeking to hold the office of President, was stepped down by the sponsor, Adewunmi Onanuga, after a very stormy debate on the general principles.

Proponents of the tax reform bills are concerned that if there is no consensus on the proposed legislations, things may go awry. Consequently, both the Executive and their foot soldiers in the House are intensifying their engagements with those opposed to the bills.

Interestingly, the House was unable to find a common ground on the bills, before proceeding on its Christmas holiday, on December 19. Expectedly, the four executive bills would be on the front burner, when the House resumes plenary on January 14, 2025.

The question is can lawmakers find a common ground on the tax reform bills, especially on the contentious formula for sharing the proceeds of VAT amongst states and local government? It seems only time will tell.



Source link

Leave a Reply