House of Representatives Debates Tax Reform Bills Amid Regional Concerns
Lawmakers from the northern region of Nigeria have raised fresh objections to four proposed tax reform bills currently under consideration in the National Assembly. These concerns were highlighted during an interactive session in Abuja with members of the Presidential Committee on Fiscal Policy and Tax Reforms.
The bills in question include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. The proposed legislation seeks to overhaul Nigeria’s tax structure, streamline processes, and expand the country’s revenue base.
Northern Lawmakers Oppose VAT Revenue Amendments
Central to the controversy is the proposed amendment to the distribution of Value Added Tax (VAT) revenue, which northern lawmakers argue could disproportionately affect their region’s already fragile economy. Representatives, including Yusuf Adamu Gagdi (Plateau), Ahmed Jaha Babawo (Borno), Zainab Gimba (Borno), and Zakariah Dauda Nyampah (Adamawa), expressed concerns about how security challenges and economic vulnerabilities in the North could be exacerbated by the reforms.
Rep. Gagdi lamented that insecurity had disrupted economic activities in many northern states, leaving a significant portion of the population displaced or unproductive. Similarly, Rep. Jaha criticized the timing of the reforms, suggesting that the derivation-based revenue-sharing formula would unfairly disadvantage northern states.
National Interest Takes Precedence, Say Leaders
Despite these reservations, President Bola Ahmed Tinubu has insisted on continuing the legislative process, emphasizing that consultations during deliberations can address concerns without withdrawing the bills.
House Speaker Tajudeen Abbas assured Nigerians that the bills would be carefully scrutinized to serve the national interest. “These bills aim to diversify our revenue base, promote equity, and foster an enabling environment for investment and innovation,” he said. Abbas added that pre-legislative scrutiny is essential to align proposed reforms with constitutional provisions and public expectations.
Rep. Alhassan Ado Doguwa, Leader of the Northern Regional Caucus, pledged to balance regional and national interests during the deliberations. “National interest will be our guiding principle,” he affirmed.
Presidential Committee Allays Fears
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, clarified that the reforms aim to simplify Nigeria’s tax system, reduce the number of taxes, and eliminate burdensome levies. He dismissed claims of regional bias, highlighting that essential goods and services such as food, education, and healthcare would be exempt from VAT.
Oyedele also emphasized that the reforms would address inefficiencies in VAT distribution, ensuring that states benefit based on consumption. Additionally, over 97% of small and medium enterprises (SMEs) would be exempt from charging VAT, easing their financial burdens.
A Path to Fiscal Stability
The proposed reforms align with the Tinubu administration’s broader goal of improving Nigeria’s tax-to-GDP ratio, which currently stands at a meager 6%, far below the global average. Abbas stressed that achieving fiscal stability through improved taxation would reduce the country’s reliance on debt financing.
The Federal Inland Revenue Service (FIRS) Chairman, Dr. Zacch Adedeji, pledged the agency’s readiness to implement the proposed changes, pending their passage by the National Assembly.
Next Steps
The ongoing debates underscore the importance of balancing regional concerns with national economic objectives. Lawmakers have promised to continue consultations and ensure that the final legislation reflects the collective good of all Nigerians.