Tax Reform Bills will Legislate Customs Service out of Existence – Adeniyi
The comptroller general of the Nigeria Customs Service (NCS), Bashir Adeniyi, says the proposed tax reform bills are in jurisdictional conflict with the NCS and will legislate the agency out of existence.
Adeniyi raised this concern at the public hearing on the tax reform bills organised by the House of Representatives Committee on Finance on Wednesday.
Presenting key objections contained in a 17-page memorandum before the committee, Adeniyi expressed fears that the bills might override existing laws, including the Nigeria Customs Service Act, 2023.
Adeniyi emphatically pointed to Section 1 of the Nigerian Revenue Service Establishment Bill 2024, which provides a legal framework for the administration of taxes and revenue under any law, where Section 42 defines tax to include any duty and revenue accruable to the government.
The NCS boss said this particular section subsumes everything that is provided under sections 3 and 4 of the Nigeria Customs Act 2023. He also highlighted that sections 23, 29 and Section 41 of the Joint Revenue Bill have jurisdictional conflict issues.
“Basically, these are jurisdictional conflict issues. In the Nigerian Revenue Service Established Bill, Section 1 seeks to completely legislate Nigerian Customs Service out of existence, if you pardon my words,” he stated.
He further disclosed that Section 4 of the Revenue Service Bill provides another omnibus provision, as it gives the proposed NRS oversight functions over all taxes and levies.
“We are worried that this new law is seeking to override all previous laws that were done to address issues regarding the economy,” he said.
The CG recommended that other agencies or proposed agencies should be made to work collaboratively with the Customs and not seek to abolish it.
“The principal recommendation we made was that we should encourage collaboration, integration of operations between customs and the tax authority, not to abolish customs, or not to repeal the law, because we want to do another law.
TUC, Sharia council reject proposed VAT increase
Meanwhile, the Trade Union Congress of Nigeria (TUC) and the Supreme Council for Shari’ah in Nigeria (SCSN) are also opposing the proposed gradual increase in Value Added Tax (VAT) from 7.5 percent to 15 percent, as outlined in the tax reform bills.
Festus Osifo, TUC president, represented by Nuhu Toro, the Congress’ secretary-general, stressed that maintaining the VAT at 7.5 percent is in the best interest of the nation. He argued that any increase would impose an additional financial burden on Nigerians, many of whom are already grappling with economic hardship.
“The proposed increase is coming at a time of rising inflation and unemployment. Higher taxes will further strain households and businesses, potentially slowing down the economy,” he stated.
Osifo recommended raising the tax exemption threshold from the proposed N800,000 to N2.5 million per annum. This, he argued, would provide relief to struggling Nigerians within that income bracket, easing their economic challenges and increasing their disposable income.
Additionally, the TUC president rejected the proposed section of the bill that seeks to scrap and defund the Tertiary Education Trust Fund (TETFUND) and the National Agency for Science and Engineering Infrastructure (NASENI). He maintained that both institutions have significantly contributed to national development through their respective mandates.
Osifo also expressed concerns over the proposed Nigerian Revenue Service Bill, which aims to transfer the responsibility of collecting royalties and other revenues in the oil and gas sector from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to the new revenue agency.
Similarly, Ahmed Bello, a representative of the Supreme Council for Shari’ah in Nigeria, supported the TUC’s position on VAT. He suggested that the government should consider reducing VAT back to 5 percent or, at the very least, maintain the current 7.5 percent, given the prevailing economic realities in the country.
Lawmakers pledge fair, transparent tax system
Similarly, Tajudeen Abbas, speaker of the House of Representatives, assured that the Green Chamber would give Nigerians tax laws that are transparent and fair.
He said the chamber would consider proposals and recommendations received from stakeholders and Nigerians before passing the four tax reforms bills.
Abbas also assured that the House would ensure that the bills are thoroughly scrutinised in the best interest of Nigerians.
The speaker, represented by Julius Ihonvbere, majority leader, gave this assurance during the public hearing on the tax reforms bills on Wednesday.
“The Tinubu administration is deliberate in the administration’s tax reform programme ostensibly to improve Nigeria’s tax-to-GDP ratio by streamlining and broadening the tax base. However, as representatives of the people, I have continued to hold the view that we must approach these reforms thoughtfully, understanding their potential implications for every segment of society. Taxes should be fair, transparent, and justifiable, balancing the need for public revenue with the burdens they impose on individuals and businesses.
“The House will, therefore, scrutinise these bills thoroughly, ensuring they align with the best interests of our constituents and the nation at large. We owe this duty to Nigerians, and as the People’s House, we must always be accountable to the people,” he said.
