Tayo Busayo, Abuja
DAILY COURIER - The National Economic Council (NEC) in a significant development, has called for the withdrawal of the recently proposed Tax Reform Bills, citing a lack of alignment among key stakeholders.
This resolution emerged from a NEC meeting at the Presidential Villa in Abuja, chaired by Vice President Kashim Shettima. The bills, submitted by President Bola Tinubu to the National Assembly, are based on the recommendations of the Presidential Committee on Fiscal and Tax Reforms, aiming to streamline Nigeria’s tax framework and improve revenue generation.
Governor Seyi Makinde of Oyo State, who briefed journalists after the meeting, emphasized NEC's concerns regarding insufficient consultation with stakeholders, including state governors. He highlighted that building consensus around the reform is essential to ensure equitable tax laws that benefit all Nigerians. “The Council recommended withdrawing the bill currently before the National Assembly to allow wider consultations and foster better understanding among Nigerians,” he stated.
Northern Governors' concerns on VAT sharing model
NEC's call for withdrawal comes on the heels of strong objections from the Northern Governors’ Forum, which voiced concerns over the VAT-sharing template outlined in the proposed reforms.
The Northern governors, led by Gombe State Governor Inuwa Yahaya, stated that they opposed amendments that would alter VAT distribution based on where revenue is generated rather than where goods and services are consumed. Governor Yahaya expressed concerns that the current proposal could marginalize the North, urging Northern lawmakers to resist the bill to protect their region's interests.
“We are not opposed to national policies fostering growth, but we advocate for fairness in their implementation to avoid any geopolitical marginalization,” Yahaya affirmed. The Northern governors, after meeting in Kaduna, issued a communiqué rejecting the bills, calling for equity in the tax reform process and opposing any measures that could be detrimental to Northern states.
Presidency Responds: “Reform benefits all regions equally”
In response to the Northern governors' rejection, the presidency issued a statement to clarify the objectives of the tax reform bills. Presidential spokesperson Bayo Onanuga assured that the reform is not intended to target any particular region. Instead, he explained, the bills are meant to address inefficiencies in Nigeria's tax system, boost competitiveness, and reduce redundancies.
Onanuga outlined the four key components of the reform bills, which include renaming the Federal Inland Revenue Service to the Nigeria Revenue Service, establishing a Joint Revenue Board, and implementing streamlined tax administration measures to ease compliance for businesses and individuals nationwide.
He emphasized that these reforms stem from an extensive review of existing tax laws, aimed at building a more efficient and competitive tax environment that will ultimately benefit all states.
According to Onanuga, “The proposed reforms emerged after an extensive review of tax laws and are designed to simplify tax obligations and boost Nigeria’s economy by creating a fairer system for taxpayers across the nation.”
Path Forward
With NEC’s call for the withdrawal and the presidency’s clarification, the future of the Tax Reform Bills remains uncertain. The government faces the challenge of balancing the need for modernizing Nigeria’s tax infrastructure with addressing the concerns of various regions and stakeholders.
Further consultations and possible adjustments to the proposals are likely as the administration seeks consensus on these critical reforms.
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