No Provision Will Impoverish North in Tax Bills – Presidency
The presidency yesterday reacted to the controversy surrounding the four tax reform bills that had passed second reading in the Senate, but got stuck in the House of Representatives, where further debate on the matter was suspended indefinitely.
In a statement issued by Special Adviser to the President on Information and Strategy, Bayo Onanuga, the presidency said no provision in the bills would impoverish the northern states or make the southern states, like Lagos and Rivers, more affluent.
Rather, it stated that the bills were out to better the lives of disadvantaged Nigerians struggling to earn a living.
Weighing in on the matter yesterday, Chairman, Senate Committee on Ecology and Climate Change, and senator for Bayelsa West Senatorial District, Seriake Dickson, declared that the federal legislature would pass the tax bills, despite some opposition to them.
Dickson, a two-term governor of Bayelsa State, told journalists that if the National Assembly could pass the Petroleum Industry Act (PIA), nothing would stop it from doing the same thing with the tax bills.
Former President of Nigerian Bar Association (NBA), Dr. Olisa Agbakoba, called for urgent devolution of powers across Nigeria’s three tiers of government to improve national governance, efficiency, and development.
However, a member of the House of Representatives, Hon. Ghali Tijani, described the bills as anti-people. Tijani, who represents Albasu/Gaya/Ajingi Federal Constituency of Kano State in the Green Chamber, maintained that the bills were not in tandem with public interest.
Equally yesterday, the presidential candidate of Labour Party (LP) in the 2023 general election, and former Governor of Anambra State, Peter Obi, stated that while there was nothing wrong in embarking on tax reforms, it must be done transparently.
The presidency, in the statement, stressed that the bills never made provision for the scrapping of some parastatals and agencies, like Tertiary Education Trust Fund (TETFUND), National Agency for Science and Engineering Infrastructure (NASENI), and National Information Technology Development Agency (NITDA), as being speculated in some quarters.
The release added that while President Bola Tinubu welcomed the public debate being generated by the bills, he advised leaders across the country, including governors, traditional rulers, students, and activists, among others, to use the opportunity of the public hearing to be organised by the National Assembly to ventilate their views on how to reform Nigeria’s tax and fiscal regimes.
The presidency stated, “Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.
“Unfortunately, most reactions are not grounded in facts, reality, or sufficient knowledge of the bills. While some commentators have attempted to incite the people against lawmakers, others have polarized 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.”
It explained, “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.”
The statement said, “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.
“For decades, businesses, investors, and private sector players in Nigeria have complained of being overburdened by a myriad of taxes and levies, including those earmarked to fund various government agencies and initiatives.
“The multiple taxes complicate the economic environment, making Nigeria uncompetitive for investment and preventing many businesses from growing or continuing their operations. Some companies have had to make the rational decision to relocate to other countries. We cannot continue on this path or wait for 20 years if this country is to deliver the prosperity we need for our people.
“The proposal, as contained in section 59(3) of the Nigeria Tax Bill, only seeks to consolidate some of the earmarked taxes imposed on companies and replace them with a single tax to be shared with the key agencies as beneficiaries in a phased manner until 2030.
“The time frame offers ample opportunity for the affected agencies to explore other funding sources in addition to budgetary allocations in line with the constitution and international best practices.
“It is a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it. None of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.
The released stressed, “The government imposes major taxes, be it income tax, consumption tax, or other taxes, to channel resources to its areas of priority at the time. Imposing a separate tax to fund an agency is an aberration that has yet to yield results despite the huge burden on businesses. The tax bill seeks to address this problem.
“Relevant stakeholders and public analysts owe it a duty to properly educate themselves about the bills’ contents and avoid misleading the public for any reason. We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
“In a period like this, when our people across the country look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, leaders should be more measured in their public utterances to avoid heating the polity and polarising the country unduly.”
The presidency stated, “President Tinubu welcomes the public interest these bills have generated. He encourages leaders across the country, including Governors, Traditional rulers, Civil Society Activists, Students, trade associations, professional associations, and the general public, to take advantage of the Public Hearings that the National Assembly will organise to present their views on how best to reform our taxes and fiscal regime.
“What is never in doubt is the imperative of changing the existing tax laws and administration that have become obsolete and unhelpful in achieving the growth and development we desire for our country.”
Meanwhile, Dickson declared that the National Assembly would pass the tax bills despite opposition to them in some quarters.
He also discarded fears that the planned public hearing on the bills could be chaotic if it was not postponed for further consultation.
The former governor encouraged anyone or group opposed to the bills to attend the public hearing with facts if they had issues with any sections of the proposed fiscal legislations.
Dickson maintained that if the National Assembly could pass the PIA containing three per cent statutory fees payable to the host communities, despite the Niger Delta leaders’ insistence on the 10 per cent recommended in the executive bill, the tax reform bills won’t be an exception.
The three per cent fee represents Operating Expenses or Expenditure (OPEX) of the previous year being remitted to host communities by oil companies, as stipulated in the PIA 2021.
The former governor of Bayelsa State said the late President Umaru Musa Yar’adua had proposed 10 per cent for the host communities, but the National Assembly passed three per cent, after about two decades, without any protest.
Dickson said, “The senate has passed the bills for second reading. Public hearing will take place and people should get ready to present their positions.
“The tax bill is a law like every other law and it has to go through the normal legislative process.
“Right now, taxes from Bayelsa State are paid to Lagos State and I don’t want that to continue.
“When there is consumption of any good or services from any state it should be calculated and paid to that state.
“Now, there is an opportunity to review the tax laws, to correct the anomalies and that’s why I’m in support.
“I know there are states that are feeling that when they apply the new sharing formula, they will earn less. It’s for them to raise those issues and bring the statistics. I don’t go by sentiments. I go by what is right and in the national interest.”
Asked whether there would not be uproar during the public hearing if wider consultation was not carried out, Dickson said there will be nothing like that.
He said, “Forget about uproar, there will be no uproar. Public hearing is an opportunity for people to present their matters, and nobody is going to be intimidated by the uproar.
“The PIA was passed. We wanted 10 per cent, which was what Yar’Adua proposed. They (federal lawmakers) reduced it to three per cent. Heavens did not fall. This tax reform bills will pass and heavens will not fall.”
Agbakoba, in a statement, emphasised that Nigeria’s political structure was excessively centralised, with most decisions being made in Abuja, to the detriment of effective governance at state and local government levels.
He stated, “The over-centralisation of power in Abuja has stifled national development, and this is evident in the ongoing opposition to the tax reform bill.
“While the tax reform bill is beneficial in terms of revenue generation – particularly from corporate entities and the wealthy – there are concerns about its distribution formula, which some claim does not adequately favour northern Nigeria.”
Agbakoba highlighted that the north had a valid argument regarding the proposed bill, given that revenue distribution had traditionally adhered to clear principles.
He pointed out that the northern region, with its vast agricultural potential, could generate substantial revenue through mechanisation, yet it lacked the necessary incentives and mechanisms to do so effectively.
“The time has come to devolve political and economic power from the federal government to the states and local governments,” Agbakoba asserted.
“This shift is essential for moving Nigeria from a system focused on revenue sharing to one that emphasises revenue generation. A decentralised structure would not only foster efficiency but also ensure a more equitable distribution of resources,” he added.
The legal expert also raised concerns about the excessive control held by the federal government over matters like marriage and driver’s licences, and the effect of this on governance at the local level. He questioned why such matters were centralised, when they could be more effectively managed by state and local governments.
Agbakoba pointed to the current allocation of 98 items of power to the federal government, noting that a more equitable distribution of responsibilities across the three levels of government would lead to more effective governance.
He said the approach would allow the judiciary, including the Supreme Court, to focus on matters that truly required its attention, instead of being overwhelmed by local jurisdictional issues.
He called for a comprehensive review of Nigeria’s power distribution framework, stressing that without this redistribution, the country will continue to struggle with inefficient governance and unequal revenue sharing.
Agbakoba believed it was only through devolution of power that Nigeria could achieve the economic growth and development its people deserve.
However, Tijani described the tax reform bills as anti-people.
Addressing journalists yesterday in Abuja, Tijani described the proposed legislations as capitalist bills and rejected them.
He said, “We are aware it has gone through the first reading and this is the second reading and we understand it is an executive bill.
“And most of the members, including me, so many people have an opinion about it. However, I was able to have the four bills and digest it to my own understanding and to the level of knowledge.
“However, I have a background in finance, as a student of International Corporate Finance, so I have an idea of what all this is all about.
“The bills actually are not in tandem with public interest and it’s not pro-masses. This is a capitalist bill and for such reason, I, Dr. Ghali Mustafa Tijani, I am rejecting this bill as a member that represents people.
“I’m in the parliament to ensure that my people are well represented and Nigerians have all the benefits and dividends of democracy. Therefore, these tax reform bills are capitalistic and are siphoning the poor, so to say.”
When asked to explain what he meant by the bills not being pro-masses, the lawmaker stated that the federal government should block revenue leakage rather than taxing Nigerians.
Tijani added, “You see, this is a lazy way of thinking. Nigeria has a lot of opportunities to get revenue and Nigeria is not looking in that direction. Let me give you typical examples.
“Our mineral resources sector has not been tapped adequately. If Nigeria is looking for revenue, they should invest in mineral resources, in mining, and do the necessary investments. The resources definitely will come to the country.
“Similarly, currently, Nigeria is losing a lot of money in terms of revenue, in terms of tax evasion and transfer pricing manipulation.
“And the Nigerian government or the current government should think of blocking such leakages rather than taxing more people in the country or taxing the companies that are willing to invest and employ more labour. Therefore, I think for such reasons, it’s anti-masses.”
Contributing to the debate yesterday, Obi supported the tax reform bills currently before the National Assembly, and stated that there was nothing wrong pursuing them to a logical conclusion.
In a statement on his X account, Obi said, “However, such reform must be subject to robust and informed public debate. A public hearing on tax reform is essential, allowing Nigerians from all walks of life to engage meaningfully. This is how we build public trust and ensure inclusivity in policymaking.”
According to Obi, matters of this magnitude require extensive deliberation and careful considerations and must never be rushed.
He stated, ”Public hearings must be conducted to allow for diverse opinions and inputs. Such public hearing would also enable the broadest spectrum of public opinion to be reflected in public policy.
”When considering tax reforms and similar issues, it is insufficient to focus solely on the benefits to the government, particularly in terms of increasing revenue collection. We must also take into account the overall impact on the nation and the sustainability of all its regions.”
Obi also said government must sensitise the people and secure their buy-in on any policy changes.
He said, “Trust and legitimacy are the foundation of effective governance, and without them, even the best-intended reforms may fail. Let us prioritise transparency, deliberation, and public engagement in charting the path forward. This is how we build a truly participatory democracy.”
