In the early years of Nigeria’s independence, the nation nearly funded its national budget with tax from agrarian economy. With the tax regime, the Premier of Northern Nigeria Region, Sir Sardauna Ahmadu Bello, was able to build a stadium, now Ahmadu Bello Stadium Kaduna, and the Ahmadu Bello University, Zaria. Lest I forget, the Northern Nigeria Development Company (NNDC) is also a product of tax from agrarian economy.
In Western Nigeria, the Premier, Chief Obafemi Awolowo, was able to build the 25 storey Cocoa House, first television station, Obafemi Awolowo University, all from taxes from agrarian economy. Tax is a powerful thing. We often refer to “the tax payer’s money.”
Sadly, in the Nigeria of today, oil money has distorted our common psyche about the concept of managing national wealth. However, no matter how far we have travelled on a wrong road, the only sane thing to do is retracing our steps. Conversely, tax is a way of collecting from the super-rich and spend on vulnerable sectors like health, education etc.
This is exactly what President Bola Ahmed Tinubu is attempting to do – to streamline the tax administration in Nigeria. The tax reform bill has been generating intense debate, with state governors speaking out against it. However, some argue that these critics lack knowledge or are ignorant of the bill’s contents, criticising what they haven’t read.
At a recent two-day conference with professors of economics and leadership development strategy, as well as national and international tax firms in Lagos, experts conducted a forensic examination of President Tinubu’s tax reform bill. After a comparative analysis of the GDPs of the developing nations, third world nations, and developed nations, a referendum settled for President Tinubu’s tax policies as the best option to pull the country’s economy back on its feet and keep the people productive.
It will also check against the fall of some financial institutions like former Bank of the North, Savannah Bank, Allied Bank, Societe Generale Bank and many others that were indebted. It was concluded that President Tinubu is passionate about reviving collapsed institutions in order to create jobs but the governors are saying no, simply because the tax reforms are going to benefit Nigerians directly, leaving them with no money to throw around for delegates during the next primary elections.
The tax reform bill aims to streamline tax collection, ensure compliance, and optimise revenue, which is essential for Nigeria’s economic growth and development.
To understand the bill’s potential impact, it is crucial to examine the current tax system in Nigeria. Although the country’s tax laws, including the Companies Income Tax Act (CITA), have been amended several times, there’s still room for improvement. A well-structured tax system can provide the government with necessary revenue to fund public goods and services, promoting business investment and job creation.
The tax reform bill proposes the establishment of the Nigeria Revenue Service, replacing the Federal Inland Revenue Service (FIRS), to provide a clear and concise framework for the efficient administration of tax laws. This move is expected to enhance taxpayer compliance, strengthen fiscal institutions, and foster a more effective and transparent fiscal regime.
However, critics, including state governors, have expressed reservations that the bill would erode their state’s fiscal autonomy and reduce their control over tax collection and revenue allocation. They also fear it would diminish their ability to fund state projects. But proponents of the bill argue that governors are misrepresenting its intentions to maintain their grip on power and resources.
This is quite true; state governments don’t seem to key into the Renewed Hope Agenda of President Tinubu. Or it appears they are afraid of something. If not, why would governors kick against what will definitely increase the nation’s revenue? I agree with most Nigerians who are of the opinion that the state governments are not ready to ameliorate the plight of the common man.
This is why despite all the social welfare interventions by the Tinubu federal government, there is nothing to show in the states that redemption is near for famished Nigerians. The citizens must learn to begin to ask questions about what the states are doing with bailouts from the government at the centre.
Any time Nigerians watch governors throng the Presidential Villa to meet with Asiwaju, they think the visit is to discuss about economic reforms, infrastructural development, security challenges and how to revive Nigeria’s industrial sector, and revamp the moribund Bacita Sugar Company, Jebba Paper Mills Limited, the nation’s steel rolling companies, abandoned cement factories, and the country’s refineries so that the Nigerian currency will, once again, become comparative across the world.
All we see however are selfish political interests playing out here. The governors are yet to tell the electorate how they spend huge federal allocations following the removal of fuel subsidy. None of them can boast of any meaningful project, except Lagos state where President Tinubu laid a concrete democratic and economic foundation.
The Tinubu administration must navigate public resistance, addressing the fears about the tax reform bill, while ensuring the bill’s passage. Possible solutions include amendments addressing concerns, increased engagement and education on the bill’s benefits, and building alliances with progressive governors.
Nigeria needs a robust tax system to achieve long-term economic growth and development. Tax reforms can have a significant impact on the country’s economy, as seen in previous studies. A well-structured tax system can provide the government with necessary revenue to fund public goods and services, promoting business investment and job creation.
The National Economic Council’s opposition to the bill can be attributed to the governors’ influence, as they make up the majority of the council’s membership. However, by examining the proposed changes, Nigerians can make informed decisions about the potential effects of Tinubu’s tax reform bill.
Ultimately, the bill’s fate lies with the National Assembly, which will determine its passage into law. It is essential that the legislature considers the potential benefits of the bill while addressing governors’ concerns. By doing so, Nigeria can establish a robust tax system that supports economic growth and development, ultimately benefiting ordinary Nigerians.
To develop a robust tax system in Nigeria, three key areas should be focused on. Amendments to tax laws are crucial to address emerging issues and promote economic development. Stakeholder engagement, including collaboration with state governors, is vital to ensure tax laws meet economic needs. Effective implementation, through a well-structured tax administration system is necessary to ensure compliance and revenue collection.
By implementing these measures, Nigeria can establish a tax system that supports economic growth and development, ultimately benefiting ordinary Nigerians through enhanced taxpayer compliance, strengthened fiscal institutions, and a more effective and transparent fiscal regime.
The Tinubu administration has been working tirelessly to address Nigeria’s economic challenges. Despite the country’s growing transportation difficulties, the government has promised to roll out Compressed Natural Gas (CNG)-powered buses to alleviate the situation. Although the project has faced delays due to the lack of skilled drivers and fueling points, President Tinubu remains committed to delivering on this promise.
In another effort to boost the economy, Tinubu and Bill Gates have proposed a digital identity platform to facilitate seamless tax collection. This technology, known as MOSIP, has the potential to enhance payment efficiency, increase financial inclusion, and make tax collection easier. The platform is expected to benefit the nation in the long run, with Gates emphasising that it will take a few years to realise its full potential.
Tinubu’s experience as governor of Lagos state has shown that technology can be a potent tool against corruption and financial impropriety. During his tenure, he successfully implemented tax reforms, increasing revenue generation and reducing the state’s reliance on federal allocations. This expertise is now being applied at the national level, with the president vowing to invest in technology to support a national consumer credit system and other critical interventions.
The administration’s anti-corruption war is also gaining momentum, with a reported diversion of over N44 billion from the National Social Investment Programme (NSIP) being investigated. Experts believe that tackling corruption will be crucial to the government’s success, and Tinubu has pledged to work towards redeeming the party’s image.
Overall, President Tinubu’s policies demonstrate his commitment to addressing Nigeria’s economic and social challenges. While there may be hurdles along the way, his administration remains focused on achieving self-sufficiency in food production and promoting national growth and development.
God bless Nigeria!
