According to Musa, they intend to take on two of the bills each day and the Senate Committee on Finance will invite the general public, particularly some organisations, to a two-day public hearing on the tax reform bills- the Joint Revenue Board Establishment Fund Bill, the Nigerian Revenue Services Bill, the Nigerian Tax Administration Bill, and the Nigerian Tax Bills.

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Musa said his committee had invited many heads of agencies such as the Minister of Finance and Coordinating Minister of Economy and the Minister of Trade and Investment, as well as the Attorney-General of the Federation, the Minister of Petroleum, the Chairman of the Federal Inland Revenue Service, and the Statistician General of Nigeria, who heads the National Bureau of Statistics.

Similarly, the Speaker of the House of Representatives, Tajudeen Abbas, named a Special Committee led by the Chairman of the House Committee on Finance, Abiodun Faleke, to conduct a public hearing on the tax reform bills following their passage for a second reading last week.

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The bills scaled second reading on the floor of the Lower Chamber today, six months after the President transmitted them to the National Assembly for consideration following the recommendations of the Taiwo Oyedele-led Committee on Fiscal Policy and Tax Reforms.

The bills include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.

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The bill, having scaled second reading, would now be subjected to a public hearing.

The new tax bills were enveloped in widespread controversy and sparked scathing criticisms and stiff opposition from many, including northern governors and opposition politicians who demanded their withdrawal from the National Assembly.

Meanwhile, a lawmaker, Sada Soli, feared that some sections of the new bills might contradict the 1999 constitution.

The issue of derivation, according to Soli, must be clearly defined to avoid any ambiguity.

He was hopeful that the committee saddled with the responsibility to scrutinize the bills would address the issues that might arise before the bills are passed.

Also, other lawmakers drew attention to the 40 acts that the bill sought to amend and requested that they should be laid before Parliament. The lawmakers said the issue of multiple taxation involving property purchase provided in the bill should be addressed, as the provision stated that the buyer and seller must pay tax.

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The bills – the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, have faced scrutiny from state governors, public institutions and other relevant stakeholders.

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele noted that the objective of the tax reform bills is to fix Nigeria’s economy for shared prosperity and not to generate more money as being speculated.

Among the state governors who have stood their ground against the passage and implementation of the bills is Borno State Governor, Babagana Zulum, who urged his colleagues and Northern stakeholders to reject the bills, insisting that they would damage the region’s economy if implemented.

Zulum said the bill will destroy the North entirely, while calling on President Tinubu to review the decision. However, in a tweet shared  Ajayi explained 10 ways the Tax Bills will make states richer.

According to Ajayi, the Federal Government will cede 5% out of its current 15% share of the Value-Added Tax revenue to states.

The bills will transfer income from the Electronic Money Transfer levy exclusively to states as part of stamp duties, as well as repeal obsolete stamp duty laws and re-enactment of a simplified law to enhance the revenue for states.

Read Also: Tax Reform: Governors, former-Reps Speaker, Deputy insist it’s time to implement

Under the new dispensation, the tax bills will usher in, and states will be entitled to the tax of Limited Liability Partnerships.

The tax bills will enable the state government to enjoy tax exemption on their bonds to be at par with federal government bonds when passed by the National Assembly.

Ajayi also listed that States will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income.

The integrated tax administration will provide tax intelligence to states, strengthen capacity development and collaboration, and scope of the Tax Appeal Tribunal to cover taxpayer disputes on state taxes.

The proposed tax laws grant powers for the Accountant-General of the Federation to deduct taxes unremitted by a government or Ministries, Departments and Agencies; and pay to the beneficiary sub-national government on personal income tax of workers of federal institutions in states.

The bills will serve as a framework to grant autonomy for states internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism.

Legal framework for taxation of lottery and gaming, and the introduction of withholding tax for the benefit of states.

Ajayi stressed that the bills are not injurious to the states. Apart from streamlining the tax system in Nigeria and catalysing economic output, the tax and fiscal policy reforms provide incentives for states to become economic powerhouses.

The president’s media aide urged state governors to invest in manpower and critical social and physical infrastructure in their states that will support businesses and socio-economic activities to flourish.

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At the three-hour town hall conversation on the tax reform bills, prominent Nigerians like former Speaker of the House of Representatives, Yakubu Dogara, the Chief Executive Officer of Global Investments and Trade Company, Baba Yusuf, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, Taiwo Oyedele, asserted that the time for the reform is now.

Governor Abdullahi Sule, who made his contribution at the end of the programme said the Governors wouldn’t have taken the position they took for withdrawal of the bills from the National Assembly a few weeks ago if the Town Hall had taken place earlier.

He specifically told Nigerians that had clarifications made by Taiwo Oyedele on the new formula for distribution of Value Added Tax, VAT, among the three tiers of government, known to governors a few weeks back, reservations expressed about the reform, wouldn’t have arisen.

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Oyedele had in his earlier clarification on some misconceived provisions of the reform bills, explained that the proposed tax reform aimed at shared prosperity for all Nigerians by exempting the vulnerable or the poor from personal income tax and shifting that to those who are gainfully employed, earning up to N1.5 million annually.

According to him, the proposed reform will address the most contentious issue of VAT distribution with a new formula driven by equity and shared prosperity, explaining that the current formula for sharing VAT among states is based on 20% derivation, 50% equality and 30% population.

According to Oyedele, the tax reform proposes a different model of derivation which will attribute VAT to the place of supply and consumption rather than the current model which attributes VAT to the state where it is remitted thereby favouring states with company headquarters.

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reform further stated that the derivation under the new model will account for 60% of VAT distribution for better equity and to discourage any state from seeking to administer VAT as a state tax, which will not only result in much lower revenue for all tiers of government but will impose a higher burden on businesses.

He also debunked the insinuation that some provisions of the tax reform bills are aimed at settling public agencies like the National Agency for Science and Engineering Infrastructure, NASENI, Tertiary Education Trust Fund, TETFund.

The former Speaker of the House of Representatives, Yakubu Dogara, posited at the Town Hall Conversation that the proposed tax reform would fetch the Northern part of the country $250 billion in years to come, from livestock and exploration of mineral resources.

He said he had read through the four bills and discovered that they are well intended for the economic revival of the country and wealth creation for Nigerians.

Dogara admonished Northern leaders, particularly, Governors, not to wear a cap of regionalism or religiosity at this time but that of leadership.

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