“If there is no struggle, there is no progress. Those who profess to favour freedom and yet deprecate agitation are men who want crops without plowing the ground. They want rain without thunder and lightning. They want the ocean without the roar of its mighty waters.”
—Frederick Douglas
By Enyeribe Ejiogu
The dust of controversy raised by the Tax Reform Bills sent by President Bola Tinubu to the National Assembly on October 3, 2024 is still swirling, especially as the wind of opposition driving it gained momentum with the President of the Nigeria Labour Congress (NLC), Joe Ajaero, joining the fray.
The NLC president last week added his voice to the call on President Tinubu to withdraw the proposed four tax legislations to allow for wider consultation with key stakeholders.
For many watchers of the serial skirmishes between the government (federal and state) and the Nigeria Labour Congress over the welfare of workers, it probably came as no surprise that the Organised Labour would strongly state its position on the fundamental and earth-shaking reform of Nigeria’s tax system proposed by the president as a key component of the Renewed Hope Agenda of his administration.
Long before the 2023 general election, the president had at different fora spoken about the need to widen the tax net, as a key way to generate more revenue. During his eight years tenure as Lagos State governor, Tinubu fully focused on increasing the Internally Generated Revenue (IGR) of the state through energetic tax collection. The increased tax revenue helped the state to weather the storm unleashed by former President Olusegun Obasanjo against the state when the Federal Government withheld statutory allocations to the local governments in Lagos, after the then Tinubu administration created 37 local council development areas out of the existing 20 LGAs recognized by the 1999 Constitution. The state government refused to abolish them when Obasanjo made the demand.
Upon assuming office on May 29, 2023, Tinubu, in fulfillment of the pledge on page 16 of his Renewed Hope manifesto set up the Presidential Committee on Fiscal Policy and Tax Reforms in August 2023.
The Committee headed by renowned tax expert, Taiwo Oyedele, eventually came up with a comprehensive report running into 397 pages and far-reaching recommendations, which have been codified in the provisions of the new legislations transmitted to the National Assembly.
The proposed legislations are: the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.
The intent of the Tinubu administration is to radically overhaul revenue generation and the tax administration system in the country.
The proposed bills have landmark provisions. Passage of the bills would also lead to the complete repeal or significant amendments of several existing legislations that touch on revenue generation and taxation.
Picking on the issue of the proposed amendment of the sharing formula of revenue generated from Value Added Tax (VAT), to prioritise derivation instead of population and landmass (which hitherto put the North at undue advantage), Bauchi State governor Bala Mohammed, kicked the whole Tax Reform Bill into the trash can an angry horse giving a pesky fellow a vicious kick with its hind leg. His comments set off a firestorm of negative reactions from other vociferous voices who had not even read one paragraph of the proposed legislations.
Members of President Tinubu’s rapid response squad, operating from within Aso Rock and the others in the many sympathetic mainstream and online media platforms instantly revved up the engines in defence of the tax reform initiative. They marshaled strong arguments to buttress their position on certain specific issues in the Tax Reform Bills.
However, their best efforts did not seem to have convinced a lot of people, including the senior leadership of the NLC.
In his New Year message, NLC President Joe Ajaero called on President Tinubu to withdraw the Tax Reform Bills, which he said had been found to be contentious for different reasons, particularly in the North.
Moreover, he said that the Organised Labour being a major and central stakeholder was not consulted before the proposed Tax Reform Bills were put forward for legislation into law. He also said that NLC would hold a national dialogue and present a different tax reform plan which it contended would be more acceptable to all Nigerians.
According to Proshare, a respected public policy analysis and advisory platform, “The Nigeria Tax Bill is a comprehensive piece of legislation that seeks to outline all taxes in the country hitherto administered by different laws and compress them into a single simplified law. Most importantly, the NTB vests upon the Nigeria Revenue Service (expected to succeed FIRS) powers to collect all national taxes, including royalties hitherto collected by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and excise duties, import VAT etc, hitherto collected by the Nigeria Customs Service. The coming into force of the Nigeria tax bill will lead to the repeal of 11 laws/enactments, while 13 other laws shall experience consequential amendments.
“The NTB will also revoke one subsidiary legislation and consequential amendments on two other subsidiary legislations. The laws that would be revoked once the NTB comes into effect (as currently proposed) include: Capital Gains Tax Act, Casino Act, Companies Income Tax Act, Deep Offshore and Inland Basin Act, Industrial Development (Income Tax Relief) Act, Income Tax (Authorised Communications) Act, Personal Income Tax Act, Petroleum Profits Tax Act, Stamp Duties Act, Value Added Tax Act and Venture Capital (Incentives) Act.
“The existing legislation that will witness consequential amendments include: The Petroleum Industry Act, No 6. 2021 (the areas to be deleted in the PIA include parts I – X of chapter four; the Fifth and Sixth Schedule; paragraphs 6, 9, 10, 11 and 12 of the Seventh Schedule; and subparagraph 6 of paragraph 14 of the Seventh Schedule; The Nigerian Export Processing Zones Act (sections 8 and 18(1)(a) deleted); The Oil and Gas Free Trade Zone Act (sections 8 and 18(1)(a) deleted); The National Information Technology Development Agency Act (sections 1, 2, and 3(3) deleted); The Tertiary Education Trust Fund (Establishment, Etc.) Act (sections 1, 2, and 3(3) deleted); The National Agency for Science and Engineering Infrastructure (Establishment) Act (section 20(2), paragraph b (i) and b(ii) deleted); The Customs, Excise Tariffs, Etc. (Consolidation) Act (section 21(2) deleted); The National Lottery Act (sections 35A, 35B and 35C deleted); The Nigerian Minerals and Mining Act (sections 28 and 33 deleted); The Nigeria Start-up Act (sections 25(2), (3), (4) and 29(3) deleted); The Export (Incentives and Miscellaneous Provisions) Act (section 11(1) deleted); The Federal Roads Maintenance Agency (Establishment, Etc.) Act (section 14(1)(h) deleted); The Cybercrime (Prohibition, Prevention, Etc.) Act (subsections (2)(a) and (4) of section 44 and the Second Schedule are deleted); For the subsidiary legislations, the Value Added Tax Act (Modification) Order 2021 will be revoked, while the Company Income Tax (Significant Economic Presence) Order 2020 will be amended by deleting paragraph 2 even though the parent legislation, the Company Income Tax, would be repealed. Finally, the Petroleum (Drilling and Production) Regulations 1969 would be amended by deleting regulations 60B, 60C, 61(1), (2), (4) and 62.”
Apart from trying to simplify tax laws in Nigeria, the Nigeria tax bill also reduced the tax burden in most cases for individual taxpayers and businesses.
However, what is germane is the crux of the of NLC’s opposition to the tax reform initiative. Ajaero strongly believes that there must be “transparency, honesty, and inclusivity in policymaking.
“The welfare of the citizens remains the primary justification for the existence of any government. Access to food and nutrition, quality healthcare, housing, education, transportation, and improved security, along with the right to participate in governance decisions, are key expectations of the people and workers.”
Inclusiveness, he argued, fosters ownership of government policies, ensuring stability and sustainability.
As a labour leader, Ajaero has been well acquainted with the physical injury inherent in activism.
During one official NLC assignment to Imo State, he was manhandled by security operatives and was almost blinded in one eye and required treatment overseas.