Four months after submitting tax reform bills to the National Assembly, President Bola Tinubu has intensified his push for pragmatic legislation, urging the Senate to deliver actionable laws from the proposals.
The debate surrounding these bills, once marked by fierce opposition, took a dramatic turn during a public hearing convened by the Senate Committee on Finance in Abuja.
Various stakeholders, including those previously skeptical, rallied in support. Notably, the Arewa Think Tank, led by convener Muhammad Alhaji Yakubu, dismissed claims that the northern region was against the reforms.
The bills in question—(i) The Nigeria Tax Bill 2024, (ii) Nigerian Tax Administration Bill 2024, (iii) Nigeria Revenue Service Establishment Bill 2024, and (iv) Joint Revenue Board Bill 2024—are central to Tinubu’s economic vision.
Their importance was underscored by Senator Sani Musa (Niger East), Chairman of the Senate Committee on Finance, who recounted a direct mandate from the President:
“I met President Bola Ahmed Tinubu two days ago regarding the tax reform bills, and he told me, ‘Mr Chairman, Senate Committee on Finance, go and do the needful. Give me a law that is workable from the tax reform bills I forwarded to the Senate and House of Representatives in October last year.’”
This directive set the stage for a pivotal hearing where opposition to the bills began to wane. Despite initial resistance that delayed their passage in the House of Representatives, the Senate had managed to advance them to the second reading on the 28th of November, 2024.
But on this occasion, resistance melted away as stakeholders aligned in favor of reform.
Finance Minister Wale Edun led the charge, assuring that the tax reforms were designed not to penalize the poor but to foster prosperity.
“The tax reform bills, as repeatedly explained since their introduction last year, aim to modernize our archaic tax laws to enhance efficiency, equity, and economic growth,” he stated.
The oil and gas sector also weighed in with strong backing. Mele Kyari, Group CEO of the Nigerian National Petroleum Company Limited (NNPCL), highlighted the reforms as vital to economic advancement.
“The proposed tax reform bills are a crucial enhancement for economic growth through a more efficient and effective tax collection mechanism. As Nigeria’s largest taxpayer, NNPCL has studied the reform bills and found the proposals both reasonable and necessary,” Kyari affirmed.
A surprising shift came from Mohammed Shehu, Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), who had initially opposed the bills but later embraced them.
“RMAFC supports the proposed tax reforms but recommends adjustments in the area of Value Added Tax (VAT) distribution to sub-nationals. We hope the reforms will address the issue of endless revenue remittance reconciliation with NNPCL and other entities,” he said.
Echoing these sentiments, Victor Muruako, Chairman of the Fiscal Responsibility Commission, noted that the bills align seamlessly with the Fiscal Responsibility Act 2007.
Addressing concerns over regional opposition, Muhammad Alhaji Yakubu of the Arewa Think Tank and Professor Mohammed Bello Dogarawa, representing the Supreme Council for Sharia in Nigeria, debunked allegations that the North was against the reforms.
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“It is untrue that the North opposes the tax reform bills. We have assessed their benefits and have sensitized our people accordingly,” Yakubu clarified.
Senate President Godswill Akpabio, in his opening remarks, emphasized the necessity of an inclusive and effective tax system.
“The challenge before us transcends merely passing new laws; it is about constructing a tax system that inspires confidence, promotes development, and fuels national growth.
“We cannot afford to be fragmented in our approach to revenue generation. Instead, we must come together—Federal, State, and Local Governments, alongside the private sector and civil society to create a tax system that truly works for all,” he declared.
The deliberations are set to continue, with key figures including Federal Inland Revenue Service (FIRS) Executive Chairman Zacch Adedeji, Central Bank Governor Yemi Cardoso, and the Comptroller-Generals of the Nigeria Customs Service and Nigeria Immigration Service expected to present their submissions in the next session.