From Isamil Omipidan (Abuja) and Scholastica Hir, Makurdi
On the surface, the North appears opposed to the contentious Tax Reform Bills. However, within the same North, there are those drumming support for the bills. Prominent among them is the former Speaker of the House of Representatives, Hon. Yakubu Dogara.
He recently asked northern leaders to drop their opposition to the bills and embrace them for North’s prosperity.
He had among other things said that “Intelligence is not about going to TV stations to be telling us the schools you went and grade you had, intelligence is about providing solutions, otherwise, you’re just a mere content creator. It is ridiculous to say President Tinubu wants to introduce AlphaBeta and that is why he’s introducing a new tax bill. If he wanted to do that, what stopped him from doing it now? This president is not a coward.
“No northern leader will ever do what President Tinubu has done by creating Livestock Ministry for the North. If we get it right, the North won’t need to share VAT from another state. The creation of Livestock Ministry by President Tinubu is the greatest service to the North by any president in our history. We only need to grab five per cent of the global market. We don’t need VAT from anyone,” Dogara added.
He also spared some knocks for the governors when he said “at the state level, how many governors consult when they are making laws? I’m not challenging them; as a matter of fact, in some cases, state laws are written from the living rooms of governors. So, we should remove the cap of regionalism, the cap of sectionalism, the cap of religion and put on the cap of leadership because that is what will resolve the current problem we have.”
But by last Thursday, the governor of Dogara’s home State of Bauchi, Senator Bala Mohammed insisted that the bills are tilted to favour only one section of the country. Dogara is a Christian, while the governor is a Muslim. Interestingly, the governor made his position known when he received the Christian community in Bauchi State.
The governor, who also doubles as the chairman of the Peoples Democratic Party (PDP) Governors Forum urged President Bola Tinubu to back-pedal on the tax bills, saying that doing otherwise could lead to anarchy.
According to him, the tax reform bills are not good policy for northern Nigeria “because we are not going to get money to pay you salaries. They must listen, otherwise, they are calling for anarchy and that is not good. We voted for the president in the state and other states.
“They must listen to us! They must not come up with a policy that favours only one state in the country. It is not about religion. It is not about tribe. It is about national unity. It is about national hegemony. We are all about good leadership, and we will continue to urge them for the time being, but if the situation persists, they will see our real colour. We are going to fight for it,” the governor declared.
But in Benue State, the bills appear to be receiving the required support, as the government and financial experts have described their introduction as a welcome development.
While the State Governor Rev Fr Hyacinth Alia said his administration has commenced activities of reviving moribund industries and also building new ones to retain its taxes within the State, experts say the bills should be supported and passed into law to bring governors and local government administrators to perform better in providing for the citizens.
They also stated that small business owners would experience some tax reliefs to enable them thrive economically.
A chartered accountant, Mr Nick Agule, said the tax reforms is one of the significant changes in Nigerian legislation that has taken place in recent time.
He said “Anyone that looks at the four bills; Nigerian Tax Bill, Tax Administration Bill, the Nigerian Revenue Service bill and the Joint Tax Bill and read them will agree these are one of the significant changes in Nigeria’s legislation that has taken place.
“If you talk about reforms, this is the real reforms because every reform is to make the process easier, more seamless, better and this is what these four bills have brought to the table.”
Agule who noted the controversy about the portion of the bills specifically the Nigerian tax administration bill and the Value Added Tax (VAT) explained that “currently as we have it, VAT shares 20 percent on derivation basis and the new tax bills specifically the tax administration bill is proposing 60 percent on derivation and this shift on 60 percent derivation is what is causing all the controversy.
“I will say we shouldn’t throw away the baby and the bath water if this derivation is what is causing the controversy. We can rest only that portion of the provision and allow other aspects of the bill pass and then we can come back to them.”
He said the current discussions around the tax reforms is one of the best discussions going on in Nigeria saying “we have turned federalism on its head.”
According to him, “The federalism as we copied from the United States is a subnational government. States and local government are the centres for economic activities, they generate revenue and send to the centre which is doing common services like defence, foreign policy, issuance of currency among others.
“But in Nigeria’s federalism, money is at the centre and we are doing a feeding bottle federalism sending money to the State and Local Governments. This is the reason we have not developed for a long time because the States and Local Governments have just been waiting on Abuja.
“So, I’m fully in support of the derivation policy but on one caveat, and the caveat is that the derivation data must be sweet. We must have how to guide each aspect of consumption activities whether telecommunications or banking or manufacturing to show that we can directly attribute to each State, the FCT and the Local Governments the consumption activities that are taking place in their jurisdictions and how the derivation is being carried out. Once that caveat is satisfied, let us go ahead and do the derivation thing so we can put pressure on governors and local government administrations to do better for Nigerians.”
Also speaking, a financial expert, consultant and business mogul, Ortamen Manz Denga, expressed strong support for the bill saying “Yes I agree with the Federal Government and the reasons include reforming tax for equity and fairness “
Denga argued that “If in the North, some of the states say don’t sell alcohol and states in the South are selling alcohol and getting VAT from that alcohol sale, should we allocate the resultant tax revenues on an equal basis or should the distribution of the money be weighed with contribution as the determining basis? So with that as one reason, I believe that the law should stand.”
Denga, who worked as a Managing Director of banks in several countries in Africa, retired as the regional MD of a bank in Nairobi overseeing East Africa, said Nigerians may be complaining because they are not used to paying tax.
He noted that “If you look at taxation outside Nigeria, most countries in East Africa are doing between 55 and 60 percent of corporate and VAT tax. I think it’s because as Nigerians, we are not used to paying taxes.”
He insisted that there is no basis to argue because while the corporate tax is 35 percent elsewhere, President Tinubu proposes less. He added that if we readjust, “people will take off from more equitable base.”
Explaining further the benefits of the reforms, Denga said those who are operating a saloon or restaurants can now consolidate their taxes to know exactly what they should pay. He also said “For someone who runs a restaurant and doesn’t earn more up to a certain threshold, there is total exemption, in the proposes Bill. If you go abroad and see everything expensive it is for reasons of taxation. For instance, the tenement rate on property ownership, we are supposed to pay yearly tax on it but most people don’t pay these taxes and we hardly enforce the law.
“So as long as the President is going to raise money from this window and use it to improve Infrastructure and improve the living standards for the citizenry, I think it is fair enough,” Denga added.
Meanwhile, the Benue State government has also thrown its weight in support of the tax reform bills.
The Technical Adviser (TA) to the Benue State Governor Hyacinth Alia on Media, Publicity and Strategic Communications, Mr Solomon Iorpev said the tax reforms is a welcome development.
Iorpev who noted that the State government had long made known its stand on the tax reform bills said “we don’t have a problem with the tax reforms, we are rather trying to make sure that we awaken our industries in such a way that everything that is taxable within our own industries stay here in the State.
“For instance, in the area of beer consumption, we have just launched our ZEVA Premium Lager Beer. So, once we put those things on ground, the taxes will stay with us here in Benue. We are trying to make a way to see if we can retain the taxes in our State instead of giving them back to the Nigerian breweries where it will not have any impact on our State.
“The tax reforms have come to stay and we have accepted it and we don’t have any controversies around it.”
Daily Sun recalls that the Secretary to the Government of the Federal (SGF) Sen. George Akume, another prominent northerner from Benue State, had recently called on Nigerians to support the bills as it will support the poor and foster economic growth.