- Current tax administration lacks coordination among three tiers of government, says Presidency
- Current tax administration lacks coordination among three tiers of government, says Presidency
The National Economic Council, on Thursday, asked President Bola Tinubu to withdraw the Tax Reforms Bills from the National Assembly to allow for wider consultations and consensus building.
Oyo State Governor, Seyi Makinde, said this formed part of resolutions reached at the 144th meeting of the National Economic Council at the State House, Abuja.
Makinde told journalists that the council members agreed that it was necessary to allow for consensus building and understanding of the bills among Nigerians.
“NEC noted the need for sufficient alignment on the proposed reforms and recommended the withdrawal of the tax reform bills,” he stated.
Makinde stated that this decision was made for the benefit of the country and emphasized the need for further consultations regarding the bills.
“We saw the gap and decided that there is a need for a wider consultation,” he added.
President Bola Tinubu and the Federal Executive Council recently endorsed new policy initiatives to streamline Nigeria’s tax administration processes.
The Federal Government says the new laws are meant to enhance efficiency and eliminate redundancies across the nation’s tax operations.
The reforms emerged after a review of existing tax laws since August 2023.
The National Assembly is considering four executive bills containing these tax reform efforts.
NEC’s decision came days after the Northern Governors kicked against the reform bills.
At a meeting on October 28, 2024, Governors of the 19 Northern States, under the platform of the Northern Governors’ Forum, rejected the new derivation-based model for Value-Added Tax distribution in the new tax reform bills before the National Assembly.
A communiqué read by the Chairman of the forum, Governor Muhammed Yahaya of Gombe State, said the proposition negates the interest of the North and other sub-nationals.
Existing tax administration lacks coordination among federal, state, local tax authorities, says Presidency
Also, the Presidency has said that contrary to job loss fears and perceived marginalisation of the North, the tax reform bills currently before the National Assembly will benefit all states and harmonise the country’s tax laws for greater efficiency.
It said it became necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by the administration following a meeting of the Northern Governors last Monday.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga, argued this in an explainer on Thursday.
The Presidency says the proposed laws will not increase the number of taxes currently in operation.
Instead, they are designed to “optimise and simplify existing tax frameworks.”
Onanuga noted, “It is instructive to note that these proposed laws will not increase the number of taxes currently in operation. Instead, they are designed to optimise and simplify existing tax frameworks.
“The tax rates or percentages will remain the same under these reforms, as they focus on ensuring a more equitable distribution of tax obligations without adding to the burden on Nigerians.
“The reforms will not lead to job losses. On the contrary, they are structured to stimulate new avenues for job creation by supporting a dynamic, growth-oriented economy. Importantly, these laws will not absorb or eliminate the duties of any existing department, agency, or ministry. Instead, they aim to harmonise revenue collection and administration across the federation to ensure efficiency and cooperation.”
The Presidency noted that currently, Nigeria’s tax administration lacks coordination among federal, state, and local tax authorities, often resulting in overlapping responsibilities, confusion, and inefficiency. Without reform, this inefficiency will persist.
It said the proposed laws aim to “coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers.”
Under existing laws, taxes like Company Income Tax, Personal Income Tax, Capital Gains Tax, Petroleum Profits Tax, Tertiary Education Tax, Value-Added Tax, and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.
However, “The proposed reforms seek to consolidate these multiple taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation,” Onanuga said.
On the proposed derivation-based VAT distribution model, which the Northern Governors oppose, the Presidency insisted that “the new proposal, as enunciated in the Bill, is designed to create a fairer system.”
It explained that the current model for distributing VAT is based on where the tax is remitted rather than where goods and services are supplied or consumed.
“The ongoing tax reform seeks to correct the inherent inequity in the current derivation model as a basis for distributing VAT revenue.
“The new proposal before the National Assembly outlines a different form of derivation which considers the place of supply or consumption for relevant goods and services.
“This means that states in the Northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states,” Onanuga stated.
According to the Presidency, these reforms are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country.
“There is no better time than now for the National Assembly to give due consideration to these bills that will overhaul our tax systems and create the revenue all the tiers of government require to fund the development our country and people urgently need,” it concluded.
Senate, Reps adjourn plenary amidst controversy on tax reforms bills
Amidst controversy trailing tax reforms bills forwarded to the National Assembly, by President Tinubu, both the Senate and the House of Representatives unexpectedly adjourned plenary to November 19.
The Senate had on Wednesday listed the bill on its order paper for first reading but stood it down along with other items for screening and confirmation of appointments of the seven ministerial nominees forwarded to it by President Tinubu last week.
Alien to Parliamentary practice, the bill was not listed on the order paper used by the Senate on Thursday for plenary proceedings.
Apparently disturbed by rejection of proposals contained in the bills by critical stakeholders in the polity like state governors and even some Senators like Ali Ndume ( APC Borno South) , Dandutse Muntari ( APC Katsina South), the Senate just about an hour into plenary, hurriedly moved into closed door session.
Though the Senate Leader, Senator Opeyemi Bamidele ( APC Ekiti Central), who moved motion for the hurried session, he hinged it on matters relating to smooth running of the National Assembly, but the President of the Senate, Godswill Akpabio after about two hours of the session said matters of urgent national importance were discussed.
Akpabio said, “Distinguished colleagues, the Senate at the closed door session deliberated on matters of urgent national importance. Is this a true reflection of what transpired at the closed door session?” which the Senators responded to affirmatively.
What further made the adjournment unexpected and hurriedly taken was the fact that after the closed door session, the Senate only considered the report of its committee on Agricultural Colleges and Institutions but stood down the three other items listed for consideration.
Like a bolt from the blues, the Senate President after consideration of the report on the bill seeking for Act for establishment of University of Agriculture and Tropical Studies, Iragbiji in Osun State, announced adjournment of plenary to November 19, 2024 for oversight and committee engagements.
According to the parliamentary calendar, lawmakers usually do not go on recess at the time of the year when the president is expected to submit the budget and other related documents.
Tinubu urges French, Chinese, Danish Ambassadors to translate friendships into economic gains for citizens
In a related development, President Tinubu Thursday in Abuja said the cordial relations enjoyed between Nigeria, Republic of France, People’s Republic of China, and Kingdom of Denmark over many years should translate into mutual economic benefits for citizens, particularly in key areas of education, health and infrastructure.
The President gave an assurance of expanding economic diplomacy at a ceremony at the State House to receive Letters of Credence from the Ambassador of the French Republic, Marc Fonbaustier; Ambassador of the Kingdom of Denmark, Jens Ole Bach Hansen, and Ambassador of the People’s Republic of China, Yu Dunhai.
President Tinubu, who is scheduled to pay a state visit to France, told the French Ambassador that his friendship with Emmanuel Macron, and the diplomatic ties between both countries, should be felt by citizens.
He urged for French support for the ongoing reforms in the country, which seeks to strengthen institutions and improve the livelihood of citizens.
“Macron has been a good friend over many years, and I am looking forward to the State Visit in Paris to solidify our relationship, and ensure that our citizens also share in the gains of diplomacy between both countries.
“I am happy you are not a stranger in Africa from your background. Nigeria is the biggest country on the continent, and the headquarters of ECOWAS is based here. We have an open door policy, and we want your investors to take advantage of it.
“Our collaboration is essential for Africa, ECOWAS and Nigeria. You can always get in touch through the Ministry of Foreign Affairs, or the Chief of Staff to the President,’’ the President added.
The French Ambassador affirmed the warmth, hospitality and diversity of Nigerian culture, assuring that he will put all effort to upscale the partnership for a shared economic prosperity.
“Mr President, I must praise and express my admiration for your achievements. You have taken a bold step in developing the country, and I encourage you to stand, and do the right thing for Nigeria,’’ Fonbaustier stated.
In a meeting with the Chinese Ambassador, President Tinubu appreciated the President of the Republic of China, Xi Jinping, for hosting him during his State visit to Beijing, and participation in the Forum on China-Africa Cooperation.
He urged the envoy to work hard with the Ministry of Foreign Affairs to translate the agreements signed into reality.
“I enjoyed my visit to China, and I particularly look forward to the activation of all the agreements we signed especially on trade and economic progress for both countries,” he said.
The President said Nigeria will continue to leverage and build on the Chinese experience, especially in trade and infrastructure development.
The Chinese Ambassador thanked the President for honouring the invitation to visit in September.
“Your visit was a great success and your presence resonated very well. It was a milestone in our bilateral relations. It was important for both countries to agree to elevate our bilateral relations. We will continue to explore development paths to suit Nigeria, through the Renewed Hope Agenda.
“We have enjoyed more than half a century of relations. We have respect for each other and treat each other with equity, and our relations have grown from strength to strength, particularly in economics and trade,’’ the Chinese ambassador said.
Yu said he had already started some programmes with some states on improving yields for rice and yams, a mobile medical outreach to the less privileged, and educational exchange programmes that will enhance vocational and technical skills in the country.
“Mr President, you are a reformer, and our people respect reformers. Like you said in your Independence Day speech, Nigerians are tenacious and resilient,’’ he added.
President Tinubu welcomed the Ambassador of Denmark, adding that he looked forward to improved relations.
“Your country is known for promotion of democratic values and human rights and we are ready to collaborate with you. We have seen your engagements in the energy sector in your country, and around the world, and we will like to benefit from that.
“We are interested in education, Medicare and areas that directly impact the livelihood of our people. We have seen the progress of the APM terminal in Lagos, a company from the kingdom of Denmark. Nigeria is good for business, and we want to continue to promote that aspect,’’ the President said.
The Danish ambassador said his country has evolved a new strategy to improve relations with Africa, and Nigeria will play a central role in the implementation, considering its size and influence on the continent.
“We recognize your influence globally and regionally, and we will continue to cooperate and expand relations with Nigeria, especially in areas of trade and economy,’’ the ambassador added.
