Intensify horse-trading ahead National Assembly resumption
Stakeholders across the country are using the current Christmas and New Year period to review and discuss the controversial Tax Reform Bills ahead of resumption of debate on the bills by the National Assembly early in 2025, The Nation can now report.
It is understood that governors and federal legislators have been reaching out to critical interest groups and individuals in their states and constituencies to feel their pulse on the matter.
While the issue appears almost settled in the South West, South East and South-South with the governors and the NASS caucuses from the three geo-political zones expressing their support, it continues to generate intense opposition in the North East, North West and North Central.
Only on Christmas Day, Bauchi State Governor Bala Mohammed said in Bauchi that the planned tax reforms were not good for northern Nigeria because “we are not going to get money to pay you salaries.”
The federal government, he said, “must listen to us! They must not come up with a policy that favours only one state in the country.”
He added: “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.”
The Senate suspended action on the tax reform bills on December 4 and mandated its ad-hoc committee chaired by Abba Moro to meet with the Attorney General of the Federation and Justice Minister Lateef Fagbemi (SAN) to resolve contentious clauses of the bills. These include those dealing with derivative and VAT sharing formula.
The Senate also asked its Finance Committee to stay action on public hearing on the issue to enable it address public agitation first.
Some zonal caucuses in the Senate which did not directly oppose the bills said they would be engaging with their constituents during the ongoing Christmas and New Year break.
A source close to the Nigerian Southern Senators Forum told The Nation yesterday that the Yuletide celebration had delayed the commencement of meaningful consultations between Senators and their constituents.
“As far as I know, nobody’s doing any consultation at the moment. Everybody is concentrating their efforts on satisfying their constituents during this Yuletide,” the source said.
“The pressure of Yuletide is really too much for anybody to talk about the Bills. I believe things will kick off in the new year before the resumption of plenary,” the source added.
Another source close to the South East Senate caucus said the holiday was not a hindrance as Senators were working at different levels to engage their constituents.
He also said the good thing is that since the Governor’s Forum has endorsed the Bills, the Senators would work to be in sync with their governors.
“Even though some senators have gone on holidays, they are equally doing things at other levels,” the source said.
“You know that most of these consultations will take place in their homes and those of their constituents. They will consult individually before they articulate their positions.”
“But I don’t think they are against the Bills. They want to carry out further consultations.
“In fact, they want the Bills and the intended reforms but they don’t want their support for the Bills to appear unilateral hence their decision to consult more widely.
“You know that the governors in the South East have supported the bills, and in that case they would want to be in sync with their governors.
“If you check very well, you will notice that the South East is not pushing back on the Bills,” the source added.
Speaking on the bills during his media chat last Monday, President Bola Tinubu said tax amendments require negotiations and concessions, and he was open to such.
But he also said the reforms had come to stay.
His words: “That reform is here to stay. We cannot continue to do what we were doing in past years. We cannot retool the system using the old methods.
“I am focused on what Nigerians need and what I must do for Nigeria. It is not going to be an El Dorado for everyone.
“Tax matters are subject to debate, review and negotiation until you reach a consensus. That is all I am going to say about that.”
Taking a cue from the position of the Northern States Governors Forum (NSGF) on the bills, Borno State Governor Babagana Zulum had said early this month that the VAT sharing formula proposed by the bills was designed to benefit Lagos and Rivers states more than other parts of the country.
But in a reaction to the governor’s fears, Presidential spokesman, Bayo Onanuga, said the bills were generally conceived to “enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.”
He said most of the comments on the issue were not grounded in facts, reality or sufficient knowledge of the bills.
He said: “While some commentators have attempted to incite the people against lawmakers, others have polarised one section of the country against another.
“The tax reform bills will not make Lagos or Rivers more affluent and other parts of the country, as recklessly canvassed, poorer.
“The bills will not destroy the economy of any section of the country. Instead, they aim to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.
“Contrary to the lies being peddled, the bills do not suggest that NASENI, TETFUND and NITDA will cease to exist in 2029 after the passage of the bills.
“Government agencies, such as NASENI, TETFUND and NITDA, are funded through budgetary provisions with company income tax and other taxes paid by the same businesses that are being overburdened with the special taxes.
“One reason President Bola Tinubu embarked on the tax and fiscal policy reforms is the need to streamline tax administration in Nigeria and make the operating environment conducive for businesses.”
Opponents of the bills are kicking over the proposed increase in VAT derivation from 20 percent to 60 per cent.
Section 77 of the Nigeria Tax Administration Bill, 2024 states that: “Notwithstanding any formula that may be prescribed by any other law, the net revenue accruing by virtue of the operation of chapter six of the Nigeria Tax Act shall be distributed as follows: (a) 10% to the Federal Government; (b) 55% to the State Governments and the Federal Capital Territory; and (c) 35% to the Local Governments. Provided that 60% of the amount standing to the credit of states and local governments shall be distributed among them on the basis of derivation.”
