The controversy over the tax reform bills, designed to restructure and streamline the nation’s tax processes, underscores the need for more consultations to get the buy-in of all the critical stakeholders. It is unfortunate that what would have been a bi-partisan debate on the tax reform bills has run into a storm even before being debated in the National Assembly. Although some lawmakers from a section of the country and other stakeholders called for the withdrawal of the tax reform bills, there is even no clear signal that the presidency is going to do so.
The absence of consensus on the tax reform bills will likely overheat the polity and make some stakeholders, including the governors to work against the tax overhaul. President Bola Tinubu had last month sent four tax bills to the National Assembly to establish a unified revenue service and simplify financial obligations for businesses and citizens. The proposed reforms stemmed from a month-long review of existing laws by the presidential task force on fiscal and tax reforms committee chaired by Taiwo Oyedele.
The Committee’s recommendations were harmonised into four executive bills. They include the Nigeria tax bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for taxpayers nationwide. It also includes the Nigeria tax administration bill, which proposes new rules governing the administration of all taxes in the country and harmonise the processes across federal, states and local government jurisdictions to ease taxpayers’ compliance in all parts of the country.
Other components of the bill include the establishment of the Nigerian Revenue Service to replace the present Federal Inland Revenue Service (FIRS) and the Joint Revenue Establishment Board, covering federal and all states’ tax authorities. The tax review bill has also suggested the setting up of the Office of the tax Ombudsman under the Joint Revenue Board, serving as a complaint resolution body for taxpayers. However, the National Economic Council (NEC), comprising the 36 state governors and the key members of the Federal Government, headed by the Vice President Kashim Shettima, at its recent meeting deliberated extensively on the recommendations.
Cracks began to appear when the governors urged the Federal Government to withdraw the tax bill. Governor of Oyo State, Seyi Makinde, who announced the position of the governors said “some sections of the country are uncomfortable” with certain provisions contained in the bill. Makinde was perhaps referring to the Northern Governors Forum which at its recent meeting on October 28, in Kaduna opposed the tax overhaul bill, claiming that it negates the interest of the North and other sub-nationals. The Forum also cited possible job loss and economic turmoil for the region if the new tax proposal is passed into law. However, the presidency has dismissed the fears, and argued that the opposite is the case. Rather than withdraw the bill, the presidency urged the National Assembly to use its discretion and make the necessary inputs it deems necessary.
There is need to allow the National Assembly deliberate on the tax reform bills. Other Nigerians should also make their input into the bills during the debate. All provisions of the bills should be discussed robustly based purely on their merits. All the same, we oppose any tax review that is designed to create an unfair system or put additional tax burden on businesses and the Nigerian people. Besides, any tax reform that seeks to increase inequality in the current derivation model as a basis for distributing Value Added Tax (VAT) is unacceptable.
Going forward, the government should always consult widely on any national issue, including the tax reform bills. Unfortunately, the Tinubu administration has been deficit in carrying critical stakeholders along in many policy initiatives. On the tax reform bills, we advise the government to weigh the various complaints and observations made by the governors during the recent NEC meeting. It is not only the Northern Governors Forum that is complaining about certain economic decisions of the government. The South-East governors also feel being short-changed in many areas that ought to impact economic growth of the region and its people.
We enjoin the Federal Government to carry the people along in its policy initiatives henceforth. The government should not do anything to undermine any part of the country. Our nascent democracy can only thrive in an atmosphere of plurality of views. The government should demonstrate the willingness to tolerate opposing views. Let the government and all the critical stakeholders approach the tax reform bills with open mind and sincerity of purpose in resolving the controversy.