Tax reform: Reps suspend debate indefinitely as northern govs mount pressure

•72 lawmakers, Zulum, Tambuwal reject bills, APC slams critics as northern group protests

The House of Representatives has suspended indefinitely the debate on the Tax Reforms Bills earlier fixed for Tuesday following mounting pressure from the 19 northern states governors, The PUNCH reports.

The planned debate was called off in a memo signed by the Clerk of the House of Representatives, Dr Yahaya Danzaria, as 73 northern lawmakers kicked against the bills.

Those who rejected the bills include 48 Reps members from the North-East, 24 federal lawmakers from Kano and a former Governor of Sokoto State, Senator Aminu Tambuwal, who represents Sokoto South Senatorial District.

The memo suspending the debate dated November 30, 2024 is titled, ‘Rescheduling of Special Session on Tax Reform Bills.’

It read, “I am directed by the House leadership to inform all Honourable Members that the special session, initially scheduled for Tuesday, December 3, 2024, to discuss all the tax reform bills, has been postponed to a later date.

“This rescheduling is due to the need for further and broader consultations with all relevant stakeholders. A new date and venue for the session will be communicated in due course. We regret any inconvenience this may cause and appreciate your understanding.”

A leaked video of the closed-door session of the Green Chamber obtained by The PUNCH showed the North-East lawmakers in tense debates against the tax reform bills.

The footage shows the member representing Damboa/Gwoza/Chibok Federal Constituency, Borno State, saying, “On behalf of the 48 honourable members from the ravaged North-East sub-region, I want to first of all rely on the position of the three previous caucus leaders. In addition to this, the primary responsibility of every government is simply the welfare of its citizens.

“North-East, even before the insurgency, was the poorest region in Nigeria. Today, our people have been turned into beggars. Billionaires and millionaires of yesterday have to queue up in IDP camps in host communities to collect 10kg bags of rice.

“If other parts of the country were in our shoes, even this sitting would not be possible. We have concluded that we are going to make further consultations because there is nothing that is cast in stone.”

Giving an insight into the development during the closed-door session, a lawmaker from the North-West, stated, “As the representatives of the people, we have resolved to continue our consultation on the matter,” adding that “Things degenerated almost to a point of rebellion against the Deputy Speaker Benjamin Kalu who presided over the executive session.”

According to him, what transpired during Thursday’s executive session indicate that the bills may not have a smooth ride in the House.

“From what I can deduce, the Governors of the North are not yet convinced about the arguments in favour of the bills.  The bills are against the interest of the North and that is why we are saying, ‘if you think this is not the case, give us more time to consult with our people.’

“The speed with which they want these bills considered and passed is suspicious. This is why our governors are not convinced and we are not convinced either,” he noted.

The PUNCH reported that on September 3, 2024 President Bola Tinubu transmitted four tax reforms bills to the National Assembly for consideration following the recommendations of the Taiwo Oyedele-led Presidential Committee on Fiscal and Tax Reforms.

The bills include the Nigeria Tax Bill 2024, which aims to provide the fiscal framework for taxation in the country, and the Tax Administration Bill, which will provide a clear and concise legal framework for all taxes in the country and reduce disputes.

Others are the Nigeria Revenue Service Establishment Bill, expected to repeal the Federal Inland Revenue Service Act and establish the Nigeria Revenue Service as well as the Joint Revenue Board Establishment Bill, which will create a tax tribunal and a tax ombudsman.

On October 29, 2024, the Northern Governors Forum, the umbrella body comprising the 19 governors of the region, kicked against the bill, particularly the Value Added Tax-sharing template.

At a gathering in Kaduna, the governors directed federal lawmakers from their respective states to vote against the bills when they came up for debate in both chambers of the National Assembly.

Two days later, the National Economic Council presided over by Vice President Kashim Shettima advised the Federal Government to withdraw the bills to create room for broader consultations among critical stakeholders, a counsel turned down by the President in a statement by his spokesman, Bayo Onanuga.

Last week, the Tajudeen Abbas-led 10th House spent over two hours in executive session to forge a common front on the bills, only to emerge to announce the continuation of consultation ahead of the debate on the general principles of the bills.

One of our correspondents gathered that the bills would have been debated on Tuesday, but the intense pressure on lawmakers fuelled by Friday’s remark of Borno State Governor, Babagana Zulum, may have triggered the postponement of the debate yet again.

Zulum was quoted in an interview with BBC as saying, “Why the rush? The Petroleum Industry Bill took almost 20 years before it was finally passed. But this tax reform bill is being transmitted and receiving legislative attention within a week. It should be treated carefully and with caution so that even after our exit, our children will reap its benefits.

“We condemn these bills sent to the National Assembly. They will drag the North backwards and also affect the South East, South West, and some South-Western states like Oyo, Osun, Ekiti, and Ondo.”

In what appeared a reminder of how Tinubu was elected the President, Zulum urged him not to gloss over the role the North played in his election.

He added, “This is not opposition. Based on our understanding, this bill will destroy the North entirely. We call on President Tinubu to review this decision. He secured 60 per cent of his votes from the North. He should not listen to those telling him the North is not supporting him. What we need is the withdrawal of these tax bills.”

Zulum, on Sunday, however, stated that he was not an enemy of President Tinubu’s administration, insisting that if the four tax bills were passed into law, only one of the 36 states – Lagos – would be the major beneficiary.

The governor made the clarification on Channels Television’s Politics Today.

He said, “I am a strong member of the APC. If you are to count two governors who have been in support of Tinubu from 2019 to 2023, you can mention Prof Zulum. I was the first governor to come out publicly to say that power must go to the South.

“Unfortunately, the President was told by many that the North is against him. About 60.2 per cent of his votes came from the North. On this tax issue, there are a lot of misconceptions. During the NEC, we advised the Federal Government to pause for a moment to have a deeper consultation with stakeholders. That was our own statement.

“But later on, people turned it upside down. I want you to believe that our consultation is central to democracy and in a democratic setting, we are begging for the right to be consulted. This is only what has happened.”

Zulum added, “I am not an economist. But based on the calculations we did, only Lagos will benefit from, this scheme. However, we have had a series of consultation with the FIRS team and had a meeting with the tax team of Lagos State. Lagos told me that they will lose a lot if this implemented. They said ‘We did our research and concluded we will lose.’

“Then why are we in a rush? Not only in Northern Nigeria, the Southeast, South-South and even the Southwest will be severely affected. Only Lagos will benefit from this scheme. But what we are telling them is to give us time. Why are we in a rush? Let us pause and do deeper consultation because we are in a democracy.

“We should look at the nitty-gritty of these bills before passing into law. This is our only bone of contention. And then people are saying Prof Zulum and the governors are against the president. This is a democratic setting. People want us to run a garrison democracy. Most of these monies will go to Lagos. We need more time.”

Lawmakers reject bills

Corroborating the position of their state governor,Abba Kabir Yusuf, the 24 federal lawmakers from Kano State have also rejected the tax bills.

The decision was adopted during a state caucus meeting on Sunday chaired by the Kano State Deputy Governor, Aminu  Gwarzo, and attended by many state representatives.

The member representing Kumbotso Federal Constituency, Idris Dankawu, stated, “To clarify this issue, I want to inform the people of Kano State, especially the residents of Kumbotso Federal Constituency,  that based on the outcome of our meeting, we are against the proposed tax reform bills. We have agreed to work collectively to ensure that the bill is withdrawn in the overall interest of the good people of Kano State.

 “Let me reassure the good people of Kumbotso Federal Constituency that your views, opinions and yearnings will continue to receive my utmost attention and care.”

A former Governor of Sokoto State, Senator Aminu Tambuwal, similarly thumbed down the bills.

Tambuwal made his position known during the distribution of relief materials to victims of flooding as well as handing over starter packs to over one thousand beneficiaries of skills acquisition in his senatorial district on Sunday.

He condemned the timing of the bill, which he said was wrong and not in tune with the demands of the citizens.

He said, “Let me use the opportunity of this platform to address the issue that is raging for now; the issue of Tax reform as presented by President Bola Ahmed Tinubu.

“I believe this is a wrong time for any upward review of either VAT or any form of tax, the time is inauspicious, the time is very wrong.

“These are hard times for the people of Nigeria and what they are going through. What we require of the government is for it to focus on projects and programmes that will bring succour and relief to the people and not increase their hardship.

“Already, we are facing the hardship occasioned by the devaluation of the naira and removal of fuel subsidy that was done by this regime. I believe we should focus on managing the hardship and see how we can bring our people out of hardship.

“The recent statistics of National Bureau of Statistics shows that over 30 million Nigerians are already in abject poverty.”

APC lawmakers lobby

Meanwhile, two lawmakers elected on the platform of the All Progressives Congress, Philip Agbese and Babajimi Benson, have been canvassing support for the bills in the Green Chamber.

Speaking with our correspondent, Agbese, who represents Ado/Ogbadigbo/Okpokwu Federal Constituency,  Benue State, said, “We are rallying support, trying to convince our colleagues because these tax bills intend to take the burden away from poor people and small companies.”

On his part, Benson, who represents Ikorodu Federal Constituency, Lagos State and who has been a consistent advocate for the bills explained, “We have all seen the merits in the bill but we are all lobbying ourselves to make the final document accepted.”

On why the debate on the bills was put on hold, Benson said, “We understand that the tax bills have generated so much interest. We understand that as a family, broader consultations need to be done, we all need one another. We need to separate the issues; we need to ensure that contentious issues are identified and negotiated.

“We believe that in the fullness of time, the tax reforms proposed by Mr President will be adjudged as a game-changing initiative.”

In line with the position of the northern leaders, the Coalition of Northern Groups, Gombe State chapter, expressed strong opposition to the proposed tax reform bills, citing concerns that it may exacerbate regional disparities and negatively impact the economic well-being of the northern region.

In a statement signed by the state coordinator, Muhammad Deba, on Saturday, the group stated, “The new VAT regime could further widen the economic gap between the North and South. This could lead to social unrest, migration, and other negative consequences.

“The government has not provided sufficient data and analysis to justify the proposed changes to the VAT sharing formula. Without transparent and evidence-based decision-making, the potential negative impacts of the reform cannot be accurately assessed.”

Oyo’s stand

The Special Adviser to the Oyo State Governor on Media, Sulaimon Olanrewaju, on Sunday, disclosed that the state government fully backed the National Economic Council’s position on the controversial tax bills.

Olanrewaju, who spoke with The PUNCH in Ibadan, the Oyo State capital, said NEC’s position would enable the bill to meet the needs of the people.

“Well, I don’t have a response to whether it will affect the payment of salaries of civil servants or not, but I would like you to recall that the council at its meeting advised the President to withdraw the bills and allow for more discussions and consultations.

“And you will recall that all the governors were there, the past governors were there. My governor, Seyi Makinde, was the one that read the position of the council. My governor communicated the positions of the council. So, it remains the position of the Oyo State Government, that we need more consultations.

“The governor was not saying withdraw or stop the reform. To make it more effective, address the needs of the people, and correct the imbalances that have existed, it requires wider consultations and that is the position of the state. But whether it will affect the payment of salaries or not, I don’t have that information.”

Afenifere backs bill

However, the pan-Yoruba socio-political organisation, Afenifere, however, threw its weight behind the controversial bills.

The group, which disagreed with some other socio-cultural groups in the country, argued that Tinubu meant well for the country with the bills, which have passed the second reading in the Senate.

The Organising Secretary of the group, Abagun Omololu, explained that the bills had potential economic benefits for all regions, including the northern region.

He said, “Afenifere is in support of the tax reform for its promise of economic revival. We have noted that the bills are a crucial step towards stimulating the Nigerian economy, hence with the tax system reform, we hope for improvement of revenue generation at both federal and state levels. This is essential for funding critical infrastructure and social services that will benefit all Nigerians, including those in the North.

“After due scrutiny and consideration, we agree that the proposed changes to VAT administration are designed to align revenue sharing more closely with consumption patterns, affording states to receive funding based on actual economic activity rather than historical allocations.”

On its part, the Middle Belt Forum said it would support any reform that engendered justice and fairness among the federating units and put the country on the path of development.

The MBF National President, Bitrus Pogu, said the bills should be subjected to scrutiny by experts to enable Nigerians have a better understanding of the issues at stake.

“When an aspect of something is being considered rather than the holistic view, you are likely to land into a problem and that is the issue with those opposed to the tax reforms bills.

“The problem they are having is the aspect of revenue sharing, which the bills seem to have tried to make commensurate with revenue generation. I think that is where the problem is. We in Nigeria like to enjoy benefits and reap where we didn’t show. All of us have been depending on oil for all these years. This oil is a depleting resource but it is coming from somewhere,” he stated.

APC faults critics

Lending its support to the bills, the APC called for the understanding of Nigerians, saying the bills were intended to stimulate the nation’s fiscal policy framework.

 The clarification was made by the National Secretary of the APC, Senator Ajibola Basiru, in an interview with The PUNCH.

Ajibola also warned the critics of the tax reforms to desist from painting President Tinubu as a dictator.

He said, “We are not in a dictatorship where the President will by fiat make a resolution. There is separation of powers. The executive has initiated the bill. So, it is for the National Assembly, which comprises representatives from all over the country, to determine whether the bill will pass or not.

 “It is not the prerogative of only the President. People must not see him as a dictator. So, if the bill eventually passes, it will be because it has passed the test of acceptability by the majority of the Nigerian people as represented in the National Assembly.

“Secondly, a bill is only passed after it has been subjected to public hearing. What has happened now is that the bills have passed a second reading. It will now go to the committee stage from where there will be a public hearing.”

In his intervention, former Vice President Atiku Abubakar called for transparency and fairness in the ongoing review of the bills.

In a statement issued on Sunday, the Peoples Democratic Party presidential candidate in the 2023 election expressed concern over the uneven development across Nigeria’s federating units, stressing the importance of a fiscal system that ensured justice and equity.