The Presidency on Wednesday intensified moves to woo the members of the Senate to back the proposed tax reform bills, which has generated heated debates across the country.
During plenary presided over by the Deputy Senate President, Barau Jibrin, the Lawmakers were informed of the presence of President Tinubu’s team by the Leader of Senate, Opeyemi Bamidele, APC Ekiti Central.
In order to admit the President’s Team into the Hallowed Chambers, the Senate Leader invoked Order 12(1) of the Senate Standing Rules.
The Presidential Team included the Director-General of the Debt Management Office (DMO), Tanimu Yakubu, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele and the Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji, to address the Chamber on the Tax Reform Bill.
Bamidele’s motion however incurred the anger of some of the Lawmakers as they faulted Order 12 (1) arguing that it made no provision that allows non-senators to enter the chamber while the session is on.
Tensions were however doused following the intervention of the Deputy Senate President and the visitors were granted entry into the Senate Chambers.
In his address Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele urged the Senators to support the passage of the bills.
According to him, the bills were designed to protect the poor and vulnerable, boost businesses and eliminate multiple taxation.
Oyedele explained that as of 2023 the entire revenue generated from tax was barely 18 trillion naira.
He added that in individual tax contributions for example personal income tax Nigeria only collected 1.53 trillion naira in the same year South Africa collected 50.5 trillion naira, which is more than 30 times what Nigeria collected.
Contrary to public opinion Oyedele explained that the bill is meant to protect the poor and will eliminate the current practice that requires companies that recorded losses to pay tax.
“Nigerian businesses are forced to pay tax even when they have made losses out of their capital. We no longer want tax capital, Investment and Poverty. We will wait and Tap the fruits when they have invested and made prosperity.
“Imposing taxes without legislation imposes more burden on the Lower income earners and this will promote insecurity.
“We have tried to harmonise so many taxes we have in Nigeria into few high revenue yielding broad-based taxes and eliminate those taxes that impose a burden on our poorest people and stall businesses. It is only when our people are prosperous that they can have the ability to pay taxes”, Oyedele said.
In order to eliminate multiple taxation, Oyelade told the Lawmakers that the proposed bills are four in number, he stressed that bills have harmonised all major taxes to enable taxpayers to identify what they need to pay.
“The Nigerian Tax Bill brings all the major taxes in one piece of legislation once enacted will cover company income tax, personal income tax, capital base tax, excise duties tax, stamp duties and the idea is why do we have to do things in different laws and its hard for the taxpayers what they need to pay.”
With regards to personnel income, Oyedele emphasised that the bill exempts people earning above or below 800 Thousand per annum from paying personal income tax.
Also, people who earn one million naira and one million and five hundred thousand naira per annum will have a reduction in their personal income tax.
“We need to protect even the low and middle inconvenience earners, it reduces the tax on both private and public workers,” he said.
For those earning more than 100 million naira monthly, Oyedele stated they will be required to pay 25 per cent as their Personal income tax against the current 24 per cent.
Furthermore, Oyedele informed the Lawmakers that the bill seeks to eradicate four out of five taxes on Value Added Taxes (VAT) from food, accommodation, education and public transport, leaving out only one which will be imposed on items consumed by the rich.
He explained; “If you look at what Nigerians consume for survival can tax Nigerians, we believe it is time to remove VAt from this consumption.
“We propose that food and education should no longer carry VAT, public transport should not be on VAT including accommodation.
“Four out of every five consumption by the masses will no longer carry VAT, only one which is not the most basic thing which is consumed by the rich.
However, Oyelade said that the bill proposes a 15% on profits made by companies and a 25 percent reduction in Company Income tax which he said is the Global standard.
He said; “VAT today is charged on investments and capital and basic consumption. We believe that we should allow businesses to operate with Minimal costs because if we reduce the cost of doing business we have more businesses.”
Credit: The Sun