Some sociocultural organizations in the country have also expressed their opinions on the tax reform bills proposed by President Bola Tinubu, which are still the subject of intense discussions across the country.
DAILY POST reports that the controversy surrounding the tax bills followed a stiff opposition from stakeholders in the Northern part of the country.
The journey to the now controversial bills began in July 2024 when President Tinubu inaugurated the Presidential Fiscal Policy and Tax Reform Committee, PFPTRC.
The committee subsequently informed Nigerians of the move to replace the National Tax Policy with a more comprehensive “National Fiscal Policy on Fair Taxation, Responsible Borrowing and Sustainable Spending”.
This birthed the four bills, including the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. They are currently before both chambers of the National Assembly for passage.
DAILY POST reports that the contention over the bills, among other things, is the sharing of the Value Added Tax as proposed by the bills.
The principle of sharing 60 per cent of VAT revenue through the derivation principle has continued to spark debates, with the northern elites leading the opposition.
According to some of the northern stakeholders, the VAT arrangement would favour Lagos and a few other Southern states because they host many company headquarters.
DAILY POST reports that the controversy started on October 29 when the Northern Governors and traditional rulers from the region rejected the Tax Reform Bills.
Following their stance, the National Economic Council, NEC, on November 1, during its 145th meeting in Abuja, advised the president to withdraw the bills.
President Tinubu, however, insisted that the bills should be allowed to go through legislative processes.
Despite the opposition, the Tax Reform Bills on Thursday last week passed second reading at the upper legislative chamber.
Airing their own views, some socio-cultural organizations in the country, including Afenifere, Ohanaeze Ndigbo and Arewa Youths Forum, AYF, stated their positions in separate interviews with DAILY POST on Sunday.
Our correspondent reported that while Afenifere and Ohanaeze apparently backed the bills, the Arewa youths expressed mixed feelings.
FG has been unfair to North in terms of distribution of resources – AYF raises concerns
The President General of the AYF, Yerima Shettima told DAILY POST on Sunday that prior to the introduction of the bills, the Federal Government has not been fair to the North in regards to the distribution of national resources.
He noted that while a monolithic stance on the controversial tax bills is unlikely, “our concerns generally revolve around equity, fairness, and the potential for disproportionate burden on the Northern region.
“Our primary concern stems from the perception of inequitable distribution of resources and infrastructure development across the country.
“We believe that despite contributing significantly to the national GDP through agriculture and other sectors, the North historically receives less in return in terms of public services, infrastructure investment, and developmental projects.
“Consequently, the introduction of new taxes, without addressing this existing imbalance, is viewed with skepticism.
“They believe that increased taxation without corresponding improvements in infrastructure – roads, schools, hospitals – would unfairly burden a population already struggling with poverty, unemployment, and limited access to essential services.
“Another key concern is the potential impact of the tax reform on informal sectors which heavily dominate the Northern economy.
“A large portion of the Arewa youth population is employed in the informal sector – agriculture, small-scale businesses, and artisanal trades – which often operates outside the formal tax net.
“The implementation of the tax reform bill, particularly if it extends tax obligations to the informal sector, could pose a significant challenge. We fear that increased tax burdens could cripple these businesses, leading to job losses and further economic hardship”.
According to Shettima, the lack of adequate education and awareness about tax regulations in the country also exacerbates their concerns on the proposed bills.
According to him, “many young people in the informal sector lack the knowledge and resources to understand and comply with new tax laws, potentially leading to fines and penalties, further marginalizing them economically.
“Furthermore, our position is also influenced by the perceptions of governmental transparency and accountability.
“Mistrust in government institutions and concerns about the proper utilization of tax revenue are prevalent.
“We question whether the increased tax revenue generated will be effectively utilized for the benefit of all Nigerians, or if it will be mismanaged or disproportionately benefit certain regions.
“Concerns about corruption and lack of accountability in government spending further fuel this skepticism and contribute to our reluctance to embrace tax reform without robust guarantees of transparency and equitable distribution of resources.
“The lack of visible development projects and infrastructure in the North, despite past tax contributions, strengthens our belief that increased taxation without guarantees of responsible governance is unproductive.
“The absence of robust engagement and consultation with the Arewa youth by the Northern Senators during the formulation of the tax reform bill is a point of considerable frustration.
“We feel our concerns and perspectives have been largely ignored in the decision-making process.
“This lack of inclusivity fuels our distrust and reinforces our opposition to the bill in its current form.
“We call for a more participatory approach that involves meaningful dialogue and addresses our specific concerns before implementation”.
Industrious Igbos will benefit from tax reform bills – Ohanaeze backs President Tinubu
Factional Secretary-General of Ohanaeze, Okechukwu Isiguzoro told DAILY POST that after thorough consultations and evaluations, the organization realized that the Tax Reform Bills would have more benefits to the people.
According to him, the tax reform bills are not merely legislative proposals, stating that they represent a transformative opportunity for the rejuvenation of Small Medium Enterprises (SMEs) and the enhancement of the fortunes of Nigerian workers.
He believes that by “eliminating the scourge of double taxation imposed by unscrupulous state governors, these reforms will pave the way for an equitable business climate that significantly elevates both local and foreign investment potential.
“The Igbo people, renowned for our entrepreneurial spirit and unwavering commitment to economic self-determination, stand to gain immensely from these reforms.
“The proposed measures are expected to safeguard the private sector, particularly benefiting the industrious Igbos who play a pivotal role in driving the Nigerian economy through vibrant SME activities.
“In an environment characterized by fairness and transparent regulations, we are confident that the majority of the benefits arising from these tax reforms will bolster our endeavors, facilitating growth and fostering robust business opportunities.
“In light of these compelling advantages, Ohanaeze Ndigbo ardently calls upon all Southern Federal lawmakers, both in the Senate and the House of Representatives, to unify their efforts in support of President Tinubu’s transformative restructuring program within Nigeria’s economic and fiscal sectors.
“It is imperative that our Southern legislators close ranks, transcending partisan divides, to ensure that the Tax Reforms Bills navigate both chambers of the National Assembly successfully.
“We wish to reiterate our unwavering commitment to show solidarity with President Tinubu, as we expect that the Southeast Federal lawmakers will provide essential backing to these initiatives.
“This collective support is particularly noteworthy as it underscores our strategic alignment with the President following our decision to abstain from nationwide protests in August 2024, a decision made in the spirit of dialogue and cooperation.”
Isiguzoro, however, expressed concerns over the “substantial opposition that has emerged from certain factions within Northern Nigeria regarding these critical reforms”.
He alleged that Northern governors “are mobilizing their forces to stifle the progression of the Tax Reforms Bills within the National Assembly, relying on their numerical predominance to assert undue influence.
“This orchestrated opposition appears driven by a desire to perpetuate the current VAT derivation principles that unjustly favour select interests at the expense of equitable national growth.
“The implications of such maneuvers are profound. If the Northern political elites succeed in thwarting President Tinubu’s initiatives, it could set a dangerous precedent, fostering a climate of resistance against meaningful reform.
“This scenario poses a tangible threat not only to the President’s agenda but also to the broader economic aspirations of millions of Nigerians who yearn for a reformed and equitable system,” he said.
Ohanaeze urged all stakeholders, including lawmakers, business actors, and citizens, to “unite in support of these pivotal Tax Reforms Bills”, insisting that the promise of a “prosperous and just Nigeria is within our reach, but it demands our collective resolve to advocate for transparency, equity, and sustainable economic growth”.
Every state has opportunity of deriving maximum benefits – Afenifere counters northern leaders
On his part, Afenifere’s National Publicity Secretary, Comrade Jare Ajayi said the organization was of the opinion that using or including ‘derivation’ as a factor of distribution would not deprive the Northern States or any other state what is due to them.
Speaking on the concerns raised over the derivation method, Ajayi said “since people consume items and patronize services in every state, there is no reason any state will not benefit from the proceeds of VAT collected in their domains”.
Ajayi stated that the position of Northern stakeholders “further underscores the imperativeness of restructuring the country urgently so that each constituent part, zone or region etc, would be in a position to exploit and largely control the resources within its enclave”.
He added that such an arrangement would not only encourage a healthy competition, it would motivate states and individuals.
He further asserted that rather than trying to look at the assumed areas that the VAT Amendment Bill would be a disadvantage, stakeholders should look at the many positive aspects of the proposed Act and suggestions made on areas needing improvement.
“From experience, where the derivation formula has been applied such as the Niger Delta etc., benefiting states have been the gainers for it.
“Since every state has a population that can engage in activities capable of enhancing VAT, it means that every state has the opportunity of deriving maximum benefits from the new arrangement being proposed”, Ajayi added.
Written By Ochogwu Sunday