The Senate Wednesday suspended action on the controversial Tax Reforms Bills following a directive to its Committee on Finance to stay action on the public hearing pending the time the agitation in the public space is addressed.
It further constituted a special committee to meet with the executive branch and work with the federal government to resolve the issues surrounding the Bills.
Deputy Senate President Jibrin Barau announced this while presiding at the plenary session.
There have been a lot of controversies surrounding the Tax Reform Bills since its introduction to the National Assembly on the 3rd of October, 2024.
They are Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024 and Nigeria Tax Bill, 2024.
Bodies like the Northern Governors Forum, the Nigerian Governors’ Forum, the National Economic Council (NEC) among others, had at different times, expressed their reservations over the reform bills.
In view of this, the National Economic Council (NEC) advised President Bola Ahmed Tinubu to withdraw the document from the National Assembly for wider consultations.
And as a response, the Presidency said since the Bills were already before the legislature, they should be allowed to through normal legislative processes.
Further to this, the Senate Tuesday invited the president’s economic team led by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, alongside the Chairman of the Federal Inland Revenue Service (FIRS), Mr. Zacchaeus Adedeji, and Director General of the Budget Office, Mr. Tanimu Yakubu, to clarify issues around the bills.
And following the interaction with the president’s economic team, the Senate passed the bills for a second reading and transmitted same to the Senate Committee on Finance for further legislative inputs through public hearing.
But a few days after the Senate’s passage, for second reading, the Borno state governor, Professor Babagana Zulum, in an interview, criticised the bills stating that they would crumble the economy of the North.
Amidst the controversy, Senator Shehu Buba (APC, Bauchi South), in an interview with British Broadcasting Service, Hausa Service, said Northern Senators agreed to recall the Tax Reforms Bills.
He said: “These bills are complex and require thorough review by tax policy experts.”
The lawmaker said that northern lawmakers strongly opposed the proposed “derivation” formula in the Value-Added Tax (VAT) distribution system, arguing that northern states would be unfairly impacted.
Also, on Tuesday, the president instructed the judiciary to liaise with the National Assembly to clarify some grey areas that needed to be worked on.
…Putting further discourse on hold
Speaking about these controversies during plenary Wednesday, Deputy Senate President Barau noted that the delegation will meet on Thursday at the National Assembly to resolve all the issues that have been the cause of the uproar.
Barau said: “On the tax reform bills currently before us, we acknowledge that the Senate remains the highest legislative assembly in this country.
“The Senate comprises men and women of wisdom and experience, entrusted to legislate for the peace, stability, and development of the nation.
“The Senate of the Federal Republic of Nigeria, like similar bodies globally, serves as a stabilizing force in times of difficulty or disagreement. Through dialogue and consensus, the Senate has consistently provided solutions to national challenges since 1999.
“In this regard, we have decided to set aside politics, ethnicity, and regionalism to work together on resolving the issues surrounding the tax reform bills.
“In collaboration with the Executive Arm of Government, we agreed to establish a forum to identify and address contentious areas to ensure national unity and progress.
“Before the introduction of these bills, we faced numerous challenges, including insecurity and economic issues.”
“The President has been working to address these problems, and we are committed to supporting these efforts while tackling global economic challenges. We also agreed that no other issues should aggravate the country’s current difficulties.
“It has been mutually decided between the Executive and the Senate to engage the Judiciary to sort out these matters.
“The Attorney General of the Federation will be involved in discussions to identify and resolve areas of disagreement for the nation’s benefit.
“Tomorrow, the committee established by the Senate, along with its leadership, will meet with the Attorney General to address these issues.
“Consequently, the Senate Committee on Finance has been directed to pause further actions on public hearings and other matters related to the tax reform bills until the issues are resolved,” Barau added.
The intervention committee, which has all the principal officials of the Senate as members, will also include others members like Senators Adamu Ailero (PDP, Kebbi Central), Orji Kalu (APC, Abia North), Seriake Dickson (PDP, Bayelsa West), Titus Zam (APC Benue South), Abdullahi Yahaya (PDP Kebbi North), Adeola Olamilekan (APC, Ogun West), Sani Musa (APC, Niger East) and Adetokunbo Abiru (APC, Lagos East).
…Again, Oyedele explains benefits
And for the umpteenth time, Mr Oyedele, underscored the need to urgently pass the Tax Reforms Bills, a decision that didn’t go down well with Borno state Governor Babagana Umara Zulum.
Speaking Wednesday on Arise News in a response to comments by Zulum, he said the proposed 60 per cent derivation is the only way to promote more equity in the sharing of VAT while encouraging economic activities across Nigeria.
Zulum had, while featuring on Channels Television, said: “On this tax issue, there are a lot of misconceptions. We felt that the VAT provision in the tax law, based on the calculations we did, would only benefit Lagos and Rivers States. We did our research and concluded that we would lose.”
“Why are we in a rush? We advised the Federal Government to take a pause and remove some of the clauses that are detrimental to Northern Nigeria. What we are saying is, give more time, let us do deeper consultations to understand the details of this tax regime before passing it into law.”
Responding, Oyedele said: “Our small businesses are burdened with over 60 official levies, taxes, and more than 200 unofficial ones. We are struggling just to help people feed themselves because inflation is escalating.
“We have people who don’t have decent jobs. That’s why the poverty rate is high, even though the unemployment rate is officially low. We are dealing with all these issues.
“If you want to provide relief for your people, you should do it quickly because it’s urgent. It’s an emergency. The way we should respond to these issues should be similar to how the world responded to COVID-19.
“There were countries where laws were passed within two days because it was an emergency. We are not even doing it in two days. We have been working on this for over a year,” he said.
The tax expert said his also engaged with the governors. “We engaged with the governors, but you can imagine that if you manage to get airtime with them, they are unlikely to give you one or two hours. There was a particular meeting where we had only 15 minutes.
“And I said jokingly to the governors that I don’t expect Your Excellencies to read all these details because we have also shared them with your technical staff.
“But we have done all of that. The bills are now in the National Assembly. As we speak, the bills have been there for over a month. So, I don’t think that’s rushing it.”
“We are always happy to engage more, but we believe that what is happening now is healthy and good for our development because there is more attention on this issue, which provides an opportunity for further engagement.
“Because of the inequity we aim to correct, we hadn’t anticipated this pushback from other states. We thought the opposition would come from Lagos State and Rivers State, based on the data we had. It’s almost as though the people we are fighting for are now fighting us. If we had known where the pushback would come from, we would have engaged more,” the tax expert further said.
