President Bola Tinubu has publicly disagreed with the National Economic Council (NEC), which recently recommended that proposed tax reform bills be withdrawn from the National Assembly for further consultation in a significant development regarding Nigeria’s tax reform efforts.
Instead, the President is advocating for the legislative process to proceed as planned, emphasising that the ongoing discussions present an opportunity for valuable stakeholder input.
In a statement issued by his spokesman, Bayo Onanuga, on Friday, the President praised the NEC, particularly its chairman, Vice President Kashim Shettima, and the governors of the 36 states, for their guidance.
However, he expressed the firm belief that the legislative process, already underway, allows for necessary modifications without the need to retract the bills currently under consideration.
The President called for continued engagement with key stakeholders to address any concerns regarding the proposed tax reforms.
This approach, the statement explained, aims to enhance transparency and collaboration while ensuring that the legislative process is not disrupted.
The tax reform initiative, which Tinubu launched through the Presidential Committee on Tax and Fiscal Policy Reform in August 2023, seeks to revitalise Nigeria’s economy by improving productivity and creating a more favourable environment for investment and business operations. This goal is increasingly urgent as the country grapples with economic challenges.
The statement informed that the committee spent over a year collecting input from diverse sectors, including trade associations, professional bodies, ministries, state governors, and the organised private sector.
The resulting tax reform bills aim to streamline Nigeria’s tax administration and align it with global best practices.
The proposed legislation consists of four key bills, including the Nigeria Tax Bill, which is designed to eliminate multiple taxation and simplify tax obligations, aiming to make the Nigerian economy more competitive.
The Nigeria Tax Administration Bill (NTAB) proposes new administrative rules to harmonise tax processes across federal, state, and local jurisdictions, enhancing taxpayer compliance and increasing government revenue.
The Nigeria Revenue Service (Establishment) Bill seeks to rebrand the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS), reflecting its broader mandate as the revenue agency for the entire federation.
The Joint Revenue Board Establishment Bill aims to replace the Joint Tax Board with a new Joint Revenue Board that includes federal and state tax authorities. This bill will also create an Office of Tax Ombudsman to safeguard taxpayer interests and facilitate dispute resolution.
According to the presidential spokesman, the overarching goal of these reforms is to coordinate the efforts of federal, state, and local tax authorities, addressing longstanding issues of overlapping responsibilities and inefficiencies in Nigeria’s tax system.
The Presidency explained that various taxes, such as Company Income Tax (CIT), Personal Income Tax (PIT), and Value-Added Tax (VAT), are currently managed separately under distinct legislative frameworks. The proposed reforms aim to consolidate these taxes into a unified structure, reducing administrative fragmentation and enhancing the overall efficiency of tax collection.
The Presidency explained that currently, various taxes such as Company Income Tax (CIT), Personal Income Tax (PIT), and Value-Added Tax (VAT) are managed separately under distinct legislative frameworks. It posited that the proposed reforms aim to consolidate these taxes into a unified structure, reducing administrative fragmentation and enhancing the overall efficiency of tax collection.
While acknowledging differing opinions on specific provisions within the proposed bills, President Tinubu underscored the universal agreement on the necessity of reviewing and updating Nigeria’s tax laws to better align with the nation’s development agenda.
He affirmed his commitment to respecting the NEC’s recommendations while urging the council to allow the legislative process to unfold.
The statement indicated that as the nation awaits further developments, President Tinubu remained open to constructive dialogue and collaboration to ensure the success of these crucial tax reforms.
NEC, its meeting presided over by the Vice President on Thursday, had recommended the withdrawal of the bills following opposition to them by the northern states.
Following the meeting of the council,
Governor Seyi Makinde of Oyo State told correspondents that it decided to request the withdrawal as a result of the controversy the bill has engendered.
He said the withdrawal will enable all stakeholders to be carried along.
The decision followed a presentation by the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, highlighting the need for a fair taxation system, responsible borrowing, and sustainable government spending.
Makinde stated: “NEC today took a presentation from the Chairman of the Presidential Committee on fiscal policy and tax reforms. Their main focus is fair taxation, responsible borrowing, and sustainable spending.
“The council acknowledged that the country is underperforming on all indices as regards huge from major revenue sources, also tax to GDP ratio and so on.
“So, after extensive deliberation, NEC noted the need for sufficient alignment between and amongst the stakeholders for the proposed reforms.
“So, council, therefore, recommends the need to withdraw the bill currently before the National Assembly on tax reforms so that we can have wider consultations and also build consensus around these reforms for the benefit of the entire country and also to give people, for them to know the vision and where we are moving the country in terms of tax reform because there’s really a lot of miscommunication and misinformation.
“So, the bill will be withdrawn from the National Assembly. And then there will be consultations afterwards.”
Credit: Nigerian Tribune