Northern lawmakers and leaders have raised significant objections to the proposed tax reform bills currently under consideration in the National Assembly. The concerns were voiced during an interactive session organized by the House of Representatives with members of the Presidential Committee on Fiscal Policy and Tax Reforms on Monday, November 18, 2024.
The reform bills, which include the Nigeria Tax Bill 2024, Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill, aim to overhaul Nigeria’s fiscal framework. However, the proposed amendments, particularly to the distribution of Value Added Tax (VAT) revenue, have sparked heated debates.
Northern Leaders Critique VAT Redistribution
Lawmakers from the North argue that the socio-economic challenges in their region, largely driven by insecurity, have not been adequately considered. They fear the proposed VAT-sharing formula, which ties allocation to consumption and production, could further disadvantage states already grappling with economic fragility.
Rep. Yusuf Adamu Gagdi (APC, Plateau) highlighted how insecurity has disrupted the economies of many northern states, making it challenging for displaced populations to contribute to VAT-generating activities. “Industries and means of production have been severely impacted, with many residents displaced or incapacitated,” he noted.
Rep. Ahmed Jaha Babawo (APC, Borno) argued that the timing of the reforms is inappropriate, given the North’s current economic struggles. He called for a revenue-sharing formula that accounts for regional disparities and security challenges.
Rep. Zainab Gimba (APC, Borno) pointed to Borno State’s unique difficulties, urging for a VAT distribution formula that is equitable and inclusive.
Leadership Responds
The Leader of the Northern Regional Caucus in the House, Rep. Alhassan Ado Doguwa, assured Nigerians that national interest would guide the legislative process. He emphasized the importance of a meticulous approach, stating, “We will thoroughly study the bills clause by clause to ensure they serve the people and align with the country’s needs.”
Similarly, Senator Abdurahman Kawu Sumaila (Kano South) pledged to prioritize the wishes of constituents while aligning actions with national interest. He assured that deliberations on the bills would be inclusive and transparent.
Government and Reform Team Reactions
The Presidential Tax Reform Committee has defended the proposed amendments, arguing that the current VAT distribution system disproportionately favors a few states. They believe the reforms will promote fiscal fairness and equity among all regions.
Despite the pushback, President Bola Ahmed Tinubu has stated that the legislative process will proceed, allowing for amendments and inputs without withdrawing the bills entirely.
Next Steps
As deliberations continue, northern lawmakers and leaders have called for broader consultations to ensure that the final laws reflect the interests of all Nigerians. Stakeholders across the country are keenly watching the developments, given the potential long-term impact of the reforms on Nigeria’s fiscal and economic landscape
