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18+ Trending Video| Watch Now: Husband Beat Wife To Death Because She Refused To Give Him H0t $ex.In view of the spirited opposition they mounted against the four tax reform bills introduced by President Bola Tinubu in October, Northern governors could not have anticipated the speed which the bills scaled Second Reading on the floor of the Senate on Thursday, with senators from the region whom they had hoped would scuttle further progress of the bills unable to muster the numbers to mount serious obstacle. ...READ THE FULL STORY FROM SOURCE ...READ THE FULL STORY FROM SOURCE
In its wake, the governors may have returned to the drawing board, even as northern senators whose ranks, Business Hallmark had reported, have since broken, continue to rally in the hope of reaching common grounds to be able to take a position against the bills, in what is a race against time by a divided caucus.
The events leading up to passage of the bills on Thursday clearly demonstrated this division within the ranks of northern senators, with Ali Ndume, senator representing Borno South, who remains the strongest opposition voice to the bills often finding himself isolated by his northern colleagues.
The bills had passed second reading, it would be recalled, after Opeyemi Bamidele, Senate Majority leader led a debate on them. He had noted that the bills would simplify the tax landscape, reduce the burden on small businesses, and streamline how taxes are collected.
The bills, he had said, “will eliminate double taxation. In the area of tax exemption of the salaries below the minimum wage, it is proposed that the state governments share 55 percent of VAT from 15 percent. There is a reasonable effort to establish core tax statutes in the bill.”
The debate, coming after Zacch Adedeji, chair of Federal Inland Revenue Service (FIRS) and Taiwo Oyedele, head of the Presidential Committee on Fiscal and Tax Reforms that drafted the bills, took time to explain the implications and the rationale behind the proposals, meant that not many senators were in the mood to oppose their passage, even if they mostly accepted that there were legitimate concerns that needed to be addressed at the committee stage.
Efforts by Senator Ndume – who argued that the bills be stood down for further legislative work – to block the passage yielded little results, as even his fellow northern senators were evidently not in the mood, a reality that must have rattled the governors, with Prof. Babagana Zulum, governor of Borno State voicing deep concerns during an interview with BBC Hausa service on Friday.
Out of the four tax bills forwarded by President Tinubu to the National Assembly, which stemmed from the recommendations of the Oyedele led committee, it is the Value Added Tax (VAT) section of the Nigeria Tax Bill 2024, which is expected to provide the fiscal framework for taxation in the country, that has rilled up the northern governors and a number of stakeholders from the region.
The bill proposes the removal of VAT from the Federal Account Allocation Committee (FAAC). Charged on consumption of goods and services, VAT under the current system, is distributed 20 percent based on derivation; 30 percent based on population of the states, while the remaining 50 percent is shared equally among all states.
The sharing formula means that while Lagos generates more than half of the total at 55 percent, it gets almost same share as Kano, which on paper has more population, but generates only 1.4 percent of the VAT. The bills thus seek to correct this presumed anomaly by ensuring that 60 percent of the VAT will go the state of collection, as a way of rewarding states for generating more economic activities.
But the proposal have come with its own controversies, and continues to be viewed by those who oppose the bills as an attempt to cheat other states in favour of Lagos where most of the companies in Nigeria have their headquarters and remit VAT, even though a chunk of the consumption takes place in other states.
However, Mr. Oyedele chairman of the reforms committee had explained that under the proposed formula, VAT will be remitted to states where consumption takes place, not where the headquarters of the company that produce the consumed goods is located, as is currently the case, which explains why Lagos, which hosts most of the manufacturing companies in the country, accounts for more than half of all VATs generated.
“Take for instance, almost all the banks are headquartered in Lagos. They pay the VAT in Lagos. The beverage companies: Nigeria Breweries, Coca-Cola and so on, sell beverages across Nigeria but they file in Lagos. That VAT that is remitted in Lagos is attributed to Lagos as being derived from Lagos, but it’s not derived from Lagos,” Oyedele explained during an appearance on Channels TV Hard Copy recently.
“When you make calls, it is derived from across Nigeria, which was why we thought that the hard conversation we were going to have was convincing Lagos State to accept this our new method that says, ‘move away from where VAT is remitted to where the consumption takes place.’ Every state in Nigeria would use mobile phone. They will use airtime. They will buy soft drinks. They will use cement. They’re building houses everywhere. Dangote will remit the VAT in Lagos. So we said, let’s correct this distorted derivation so it reflects economic activities everywhere those activities take place for the purpose of sharing.”
His explanation in this regard, has, nonetheless, not convinced the likes of Ndume who re-echoed these concerns while making his arguments on Thursday. Although he agreed that the reforms were necessary “if we have to move forward,” he insisted that he had a problem with “its timing,” and two, “the issue of derivation and VAT. The constitution has to be amended for some of these provisions to be effected.”
But Borno South senator was countered by none other than Tahir Monguno, the senate Chief Whip and fellow Borno senator, who represents Borno North District.
Senator Monguno argued that the bills should not be withdrawn and that changes could be made during the public hearing on them, affirming that, “These bills will reduce the tax burden on Nigerians.”
Ndume Isolated
Although a number of Northern senators had initially voiced their disapproval of the bills, many, Business Hallmark gathered, has since changed their stance, with Ndume who remains unyielding finding himself increasingly isolated.
Although northern senators had met behind closed doors in room 301 for about two hours after the reforms scaled second reading on Thursday and subsequently refused to disclose what they discussed, feelers suggest that they only agreed to raise their concerns during deliberations at the committee stage.
The Senate had indeed tasked its committee on Finance to invite governors, traditional rulers, and other stakeholders to attend a public hearing on the bills.
Earlier on Wednesday, Ndume protested the entry of Adedeji into the chamber, leading to an uproar on the floor. Adedeji’s briefing had not been outlined in the senate order paper, which had prompted Opeyemi Bamidele, majority leader, to move a motion for the suspension of the senate rules.
Citing the rules of the senate, Ndume had said visitors were not allowed into the red chamber to speak if the item was not listed on the order paper. He said there should have been a supplementary order paper to reflect that the senate would receive briefing from Adedeji and other tax experts.
“This is a very important matter. We should not in any way try to use the position of the senate because the order paper is clear. I have no problem having them come to explain whatsoever but we must follow known procedures,” he had said.
“Mr President, you can have your way, but I will have my say. You can use your gavel and I will use my voice. The tax reform bill is very sensitive, our people have been dominated by this matter. When you say, it is a matter of urgent national importance, yes, but even those matters normally refer to another legislative day if they are so inconvenient.
“Please I beg you in the name of God. This matter is very important to not only us, but Nigerians call that we represent and we swore by the Bible and Holy Quran that we will represent the interest of the people.”
However, Barau Jibrin, deputy senate president and senator representing Kano North sharply countered him, arguing that the senate was operating within its rules and that he had made his point.
“You have made your point. Now we are not here for rhetorics,” Jibrin said, and before the presiding officer could finish his thoughts, the chamber got rowdy.
Jibrin was, however, able to restore order, and Adedeji was eventually led into the chamber by a sergeant-at-arms to address the floor.
Gov. Zulum, others fume
Angered by speedy passage of the bills for second reading, several northern voices, including Governor Zulum have risen in condemnation.
Zulum in an interview with BBC Hausa on Friday, slammed the speed with which the bill is progressing through the legislative process, drawing comparisons to the Petroleum Industry Bill, which took nearly two decades to pass.
“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,” Zulum stated.
The Borno governor alleged that the bill is structured to disadvantage certain regions of the country.
“We condemn these bills sent to the National Assembly. They will drag the North backward and also affect the South East, South South and some South-Western states like Oyo, Osun, Ekiti, and Ondo,” he added.
Zulum further alleged that some individuals might be influencing President Bola Ahmed Tinubu into believing that the North does not support his administration.
“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% 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,” he said.
The governor warned that if the bill is passed, Northern states would struggle to implement developmental projects, including paying salaries.
Speaking on behalf of the North East, the governor clarified that their opposition to the bill does not amount to opposition to the administration.
Atiku Abubakar, former vice president, at the weekend, also appealed to the lawmakers to ensure that the bills don’t depend uneven development in the country.
Meanwhile, Senator Ndume, who subsequently on Thursday appeared on Channels TV’s evening programme, Politics Today, also reiterated his opposition to the bills, noting that the hurry by the Presidency and some lawmakers to pass the bills looked suspicious.
“It is not that I am totally saying that we should throw away the baby with the bath water, but since the governors, who are our leaders, the National Economic Council, and many individuals have said that it is not that we should throw away the bills, no. Withdraw the bill, do more consultations, and then bring the bill again. Why are they in a hurry? That is a big suspicion, Ndume said.
“I disagree with the timing because Nigerians are struggling to survive. Our forefathers were paying taxes, in the North we pay taxes. So, it is not like we are running away from tax, we pay taxes, and every responsible Nigerian will want to pay tax, but the timing is wrong,” he said.
Several other individuals from the region have also kicked against the passage of the bills, including Ahmed Inuwa, the CEO of Shadows NIG, who described it as “a total disgrace.” While Bulama Bukarti, a senior fellow of the Tony Blair Institute, argued that the tax reform bill will “drag the northern side of the country to its knees.”
Yakubu Sani Wudil, an associate professor in renewable energy, on his part, wondered why northern lawmakers would be allowed themselves to be used to push the reforms, which he said were against the region.
“It is seriously disturbing how Northern lawmakers are being used to push the tax reform bill to the detriment of their region. Why do some politicians put their personal interests above the interests of their people? This is quite unfortunate and uncalled for,” he said.
Writing via her X account, @AyshaHamman, Aisha Hamman, a lawyer, also urged fellow northerners to oppose the bills as though their lives depended on it.
“Reject that tax reform bill like your life depends on it because your life could depend on it.”
Tanko Salihu Yakasai, former aide to Abdullahi Ganduje, ex-governor of Kano State and current national chairman of the All Progressives Congress (APC), also took to his X account, @dawisu, to express reservations.
“I am not for or against the Tax Reform Bill, for I have not had the chance to read the almost 400-page document,” he said. “But what I am against completely is the speed with which this bill is being passed at NASS. Why the rush on something so sensitive that can have far-reaching consequences to the majority of the people in the country?
“Have we not learned our lessons by the hastily removal of fuel subsidy and unification of FX without defining clearly the implementation strategy, which plunged us into the worst economic crises in the entire history of this country?
“I believe there’s need for NASS to slow down and allow robust discussions by tax experts from across the country to carefully scrutinize this tax bill, and address any grey area that has the potential to further exacerbate our situation.”
A Losing Argument
Despite the renewed opposition from certain quarters in the North following the bills’ scaling of second reading, it seems unlikely that they would be able to halt the progress, giving the growing broad-based acceptance of the proposals amid the continued efforts by Mr. Oyedele, chair of the presidential committee, to address concerns.
Mr. Oyedele, has, on various occasions reeled out some key points about the tax reform bills, noting that changes to the income tax laws to facilitate remote work opportunities for Nigerians in Nigeria within the global business process outsourcing. This, according to him, will empower youths to play a key role in the digital economy space.
He said the committee proposed a zero-rated VAT and other incentives to promote exports in goods, services and intellectual property.
“There are tax exemptions for small businesses with annual turnover of N50 million or less, including withholding tax, value added tax, and 0 per cent corporate income tax rate. It also proposed an exemption from personal income tax (PAYE) for minimum wage earners and reduced tax burden for over 90 per cent of all workers in the private and public sectors, as well as VAT at 0 per cent for food, education, health care and exemption for rent, public transportation, fuel products, and renewable energy,” he said.
These items constitute an average of 82 per cent of household consumption and nearly 100 per cent for low-income households to ameliorate the rising cost of living for the masses,” he said.
“Our proposal aims to create a fairer system by devising a different form of derivation, which takes into account the place of supply or consumption for relevant goods and services, whether they are zero-rated, exempted or taxable at the standard rate. For example, a state that produces food shouldn’t lose out just because its products are VAT-exempted or consumed in other states. The state where the supply originates should be recognized for its contributions. The same principle should apply to services like telecommunications—VAT distribution should reflect where subscribers are located.
Gowon, others canvass national interest
The attempt by opponents of the bills to rally a more broad-based northern opposition was further dealt a blow last week when Yakubu Gowon, former head of state, urged northern elites to champion causes that serve the collective interest of Nigeria rather than narrow regional concerns.
Gowon made the call on Wednesday while hosting a delegation from the Senator Ibrahim Shekarau-led League of Northern Democrats (LND) at the Yakubu Gowon Centre in Abuja.
The LND had previously opposed the proposed bills, backing the earlier position of Northern governors and traditional rulers. But in his address, Gowon emphasized the importance of fostering unity and collaboration across Nigeria’s diverse regions.
“The north must ensure that its actions are in the best interest of Nigeria. My support for the creation of states was driven by the need to address fears of domination and to promote unity among all regions of the country.”
Also speaking on the matter, Senator Monguno, during an interview on the BBC Hausa, said, “There are some good things in the bill, which I have spoken in support of like the zero tax on food items, medicine, and workers, who earn less than the new national minimum wage. These are all good.”
Monguno added, however, that the bills should be subjected to a public debate by Nigerians.
Recall that following the the October 28 meeting of Northern governors and traditional rulers during which they vehemently rejected the proposed bills, the LND endorsed the rejection, noting that they were against the interest of the North..…Read The Full Story From Source
This was yet followed on November 1, by the National Economic Council (NEC), chaired by Vice President Kashim Shettima asking President Tinubu to withdraw the proposed bills. However, the president had rejected the NEC recommendation, urging the group to allow the tax bills continue through the legislative pathways, emphasizing that ample opportunity exists for modifications.18+ Trending Video| Watch Now: Husband Beat Wife To Death Because She Refused To Give Him H0t $ex.
