Mixed reactions trail Tinubu’s Tax reforms bill
…As Presidency fires back at critics, says taxes reform bills will not scraps TETFUND, NASENI, NITDA …Tax reform bills aim to fix economy, not generate revenue — Oyedele
…As Benue, Kogi Govt back passage of bill …Peter Obi backs Tinubu’s tax reform bills
…National Assembly will pass tax reform bills, heavens won’t fall — Dickson
…Oyebode faults revenue mobilisation commission for not leading conversation on Tax Reform Bills
By Seun Ibiyemi and Matthew Denis
Mixed reactions have continued to trail President Bola Ahmed Tinubu Tax reforms as stakeholders share different perspectives over the bill.
The bills, which were submitted by the president on September 3, 2024, sparked immediate opposition from several state governors who are calling for further consultations before any legislative action is taken.
Recall that Governor Babagana Umara Zulum of Borno State warned that the proposed new tax reform bill, if passed into law, will have dire economic consequences for Nigeria, particularly for states in the northern region.
According to Zulum, while states like Lagos and Rivers stand to benefit significantly from the bill, the majority of other states, especially those with weak Internally Generated Revenue (IGR), will be left at a disadvantage.
The governor’s statement comes amid growing opposition from various stakeholders, who argue that the tax system will worsen existing regional inequalities and hinder economic development in less prosperous states.
The presidency has debunked speculations making rounds on social media that the tax reform bills are targeted at scrapping some government agencies like TETFUND, NASENI and NITDA.
In a statement signed by Bayo Onanuga, Special Adviser to the President on Information & Strategy, on Tuesday stated that “Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.
“Unfortunately, most reactions are not grounded in facts, reality, or sufficient knowledge of the bills. While some commentators have attempted to incite the people against lawmakers, others have polarised one section of the country against another.
“The tax reform bills will not make Lagos or Rivers more affluent and other parts of the country, as recklessly canvassed, poorer. The bills will not destroy the economy of any section of the country. Instead, they aim to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.
“Contrary to the lies being peddled, the bills do not suggest that NASENI, TETFUND, and NITDA will cease to exist in 2029 after the passage of the bills. Government agencies, such as NASENI, TETFUND, and NITDA, are funded through budgetary provisions with company income tax and other taxes paid by the same businesses that are being overburdened with the special taxes.”
According to the statement, “One reason President Bola Tinubu embarked on the Tax and Fiscal Policy Reforms is the need to streamline tax administration in Nigeria and make the operating environment conducive for businesses.
“For decades, businesses, investors, and private sector players in Nigeria have complained of being overburdened by a myriad of taxes and levies, including those earmarked to fund various government agencies and initiatives.
“The multiple taxes complicate the economic environment, making Nigeria uncompetitive for investment and preventing many businesses from growing or continuing their operations.
“Some companies have had to make the rational decision to relocate to other countries. We can not continue on this path or wait for 20 years if this country is to deliver the prosperity we need for our people.”
It further explained that the proposal, as contained in section 59(3) of the Nigeria Tax Bill, only seeks to consolidate some of the earmarked taxes imposed on companies and replace them with a single tax to be shared with the key agencies as beneficiaries in a phased manner until 2030.
“The time frame offers ample opportunity for the affected agencies to explore other funding sources in addition to budgetary allocations in line with the constitution and international best practices.
“It is a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it. None of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.
“The government imposes major taxes, be it income tax, consumption tax, or other taxes, to channel resources to its areas of priority at the time. Imposing a separate tax to fund an agency is an aberration that has yet to yield results despite the huge burden on businesses. The tax bill seeks to address this problem.
“Relevant stakeholders and public analysts owe it a duty to properly educate themselves about the bills’ contents and avoid misleading the public for any reason. We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
“In a period like this, when our people across the country look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, leaders should be more measured in their public utterances to avoid heating the polity and polarising the country unduly.
“President Tinubu welcomes the public interest these bills have generated. He encourages leaders across the country, including Governors, Traditional rulers, Civil Society Activists, Students, trade associations, professional associations, and the general public, to take advantage of the Public Hearings that the National Assembly will organise to present their views on how best to reform our taxes and fiscal regime.”
It added that what is never in doubt is the imperative of changing the existing tax laws and administration that have become obsolete and unhelpful in achieving the growth and development we desire for our country.
Also, Senior Special Assistant to the President on Media and Publicity, Temitope Ajayi, highlighted on Monday via X that the reforms are the result of contributions from over 80 professionals over a 14-month period, warning that any delay in their passage could mirror the protracted 20-year legislative journey of the Petroleum Industry Bill.
According to Ajayi, postponing the tax reforms would be a costly mistake the nation cannot afford.
“It is very disingenuous to say that the Tax Reform Bills, the product of 14 months of extensive work by over 80 professionals drawn from every part of the country, are being rushed through the National Assembly,” Ajayi said.
The suggestion that it took the PIB over 20 years to get through the parliament is backward thinking. Nigeria lost too much for the failure to pass the PIB on time in terms of revenue, investments, and jobs in the oil & gas sector.”
He revealed these alongside a 14-month timeline of how the tax reform bills came to be.
According to Ajayi, the PIB’s two-decade journey through Nigeria’s legislature is a cautionary tale of missed opportunities and economic stagnation.
Political gridlock, regional disagreements, and a lack of urgency kept the bill in limbo, causing Nigeria to fall behind in attracting global investments to its oil and gas sector.
Ajayi emphasised the high cost of that delay, noting how Nigeria’s inability to modernise its oil laws crippled revenue streams, limited job creation, and weakened the country’s fiscal position.
We should not wait for another 20 years to do what is right for our country,” he warned.
Unlike the PIB, the Tax Reform Bills were crafted through a rigorous 14-month process involving more than 80 experts from across Nigeria’s diverse regions and sectors. Ajayi noted in the tweet now reshared by Bayo Onanuga.
Ajayi dismissed claims that the bills are being rushed or pushed for ulterior motives, insisting that the reforms are essential to Nigeria’s economic stability and growth.
The stakes couldn’t be higher. With dwindling oil revenues and a growing debt burden, Nigeria must diversify its economy and improve its tax system to fund critical public services. Any delay, Ajayi cautioned, would jeopardise the country’s economic future.
“The most important thing is to be upright in your decision, transparent, and accountable,” Ajayi stressed.
He urged lawmakers to act swiftly, putting national interests above political differences.
…As Benue, Kogi Govt back passage of bill
In a related development, the Benue and Kogi state governments have backed the passage of the tax reform bills.
This support comes amid opposition from several Northern states against the passage of the bill in the National Assembly.
Chairman of the Kogi State Internal Revenue Service speaking at a one-day citizens’ engagement and interactive session on the Tax Reform Bills on Monday in Lokoja said that the proposed tax reform bills are designed to streamline tax administration, ease the burden on low-income earners, and stimulate economic growth.
Enehe highlighted some key proposals, including exemptions for small businesses, simplification of the VAT regime, and the introduction of a windfall tax on Nigerian banks’ FX profits.
He also discussed topics such as the importance of tax compliance, its impact on public service delivery, strategies to enhance public participation in the tax system, and addressing common misconceptions about taxes.
Aso speaking, the state’s Commissioner for Finance, Budget, and Economic Planning, Idris Asiru, noted that “the purpose of this engagement is to provide a platform for citizens to engage with policymakers, understand the importance of the proposed tax reform, and explore how it can benefit the state.”
“Tax reform plays a crucial role in ensuring fair taxation, enhancing revenue generation, and promoting economic growth in our state. Tax reforms are not just about numbers; they impact the services we deliver and the future of our economy.”
The Commissioner encouraged citizens to participate in the ongoing consultation process, offering feedback and suggestions to ensure the final bills align with the needs and aspirations of Kogi State’s residents.
His Benue counterpart in a separate interview in Benue, Michael Oglegba, expressed the state’s backing for the Federal Government’s effort to enhance revenue through taxation.
Oglegba stated, “The Tax Reform Bill is largely a good bill. We support the effort of the Federal Government to grow tax revenues.”
…Tax reform bills aim to fix economy, not generate revenue – Oyedele
The Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, on Monday explained that the objective of the tax reform bills currently before the National Assembly is to fix Nigeria’s economy for shared prosperity and not to generate more money as is being speculated.
Oyedele made the clarification when he was featured as one of the panellists on Channels Television’s Townhall on Tax Reforms.
In the past few weeks, the bills have pitched some state governors against the Federal Government, with the governors calling for the withdrawal of the bills to create room for more consultation.
But Oyedele said there are many misconceptions being peddled about the bills when it was obvious many of the critics had not taken their time to properly vet them.
He said, “Our economy is underperforming. We are not growing enough, poverty is widespread and we do not have inclusive and sustainable growth, and there can’t be shared prosperity unless we address those issues. While we face a myriad of issues, the fiscal system, including taxation clearly, is one major
“If I want to summarise it, I would say that the fiscal and tax system is like the knee on the neck of our economic prosperity as a people. It is important to state that the primary objective of the reforms is not to generate more revenue. I see people get that wrong every time. It is to fix the economy in a way that there can be shared prosperity.
“If your businesses are growing, expanding within and outside the shores of this country, if our individuals are earning income and thriving, then taxes will be a natural consequence of their prosperity. That is really the fundamental objective of the reforms. So, we know that the work we’re asked to do for our country is such an enormous amount of work, but critical.”
Continuing, Oyedele also explained why many felt the Presidency was in cahoots with the National Assembly on the bill.
According to him, they planned to get the reform bills sorted out within a year as Nigeria does not have to wait for four to five years to get it done, saying, “If we’re going to take all our time, we would have asked for about four or five years. We knew Nigeria had no luxury of time. We decided we should put in all our efforts to get this done within one year. We have tax laws that are very old and no longer fit for mobiles, including those we inherited from our colonial masters.
“So, we said we’ll use the opportunity of this reform to rewrite those laws so that the laws made by Nigerians for Nigeria to be able to drive our prosperity going forward. And that’s what led to the four bills that we have before the National Assembly today that have been properly summarised.
“So, for households and individuals, including our young population, these bills are looking to exempt low-income earners completely from tax, those who earn about N83,000 per month or N1 million a year.”
…Peter Obi backs Tinubu’s tax reform bills
The Former Labour Party presidential candidate Peter Obi has expressed cautious support for President Bola Tinubu’s tax reform bills, while calling for transparency and public participation in the process.
In a statement shared on Twitter, Obi highlighted the importance of tax reforms, describing them as a “critical issue” that requires robust public debate.
He called for public hearings to ensure inclusivity and foster trust in the policymaking process.
“Tax reform is a critical issue, and there is nothing wrong with pursuing it.
However, such reform must be subject to robust and informed public debate. A public hearing on tax reform is essential, allowing Nigerians from all walks of life to engage meaningfully. This is how we build public trust and ensure inclusivity in policymaking,” he wrote.
Obi stressed that reforms of such magnitude should not be rushed, advocating for extensive deliberation to accommodate diverse perspectives.
He further argued that any policy changes should consider their overall impact on the nation, not just the potential for increased government revenue.
“When considering tax reforms and similar issues, it is insufficient to focus solely on the benefits to the government, particularly in terms of increasing revenue collection. We must also take into account the overall impact on the nation and the sustainability of all its regions,” he added.
Obi also urged the government to prioritize sensitization and secure public buy-in for reforms, emphasizing that trust and legitimacy are the cornerstones of effective governance.
“Let us prioritise transparency, deliberation, and public engagement in charting the path forward. This is how we build a truly participatory democracy,” he concluded.
…National Assembly will pass tax reform bills, heavens won’t fall — Dickson
The Chairman, Senate Committee on Ecology and Climate Change, Seriake Dickson (PDP, Bayelsa West), has said the National Assembly will pass the tax reform bills despite opposition from different quarters.
Dickson, in an interview with journalists in Abuja on Monday, said the bills would be passed like the Petroleum Industry Bill (PIB), stressing that heavens would not fall when the tax bills are consequently passed.
President Tinubu had on October 3, 2024, transmitted to the National Assembly, four tax reform bills, in a letter, read by the Senate President Godswill Akpabio, and Speaker of the House of Representatives, Hon Tajuddeen Abbas, during separate plenaries of the two chambers
Tinubu said the bills would bolster Nigeria’s fiscal institutions, adding that they were in line with his government’s broader development objectives for the country.
But Nigerians including some governors, traditional rulers, civil society organisations, federal lawmakers and others have kicked against the bills.
Senator Dickson also dispelled the claim that the planned public hearing on the bills could be chaotic if proper consultations were not done, and urged those opposed to the bills to attend the public hearing with facts if they have issues with any sections of the proposed fiscal legislations.
Dickson, former Governor of Bayelsa State said, “The PIA was passed. We wanted 10% which was what Yar’adua proposed. They (federal lawmakers) reduced it to 3%. Heaven did not fall. This tax reform bills will pass and heavens will not fall.
“The Senate has passed the bills for second reading. Public hearing will take place and people should get ready to present their positions. The tax bill is a proposed law like every other and it has to go through the normal legislative process.
“Right now, taxes from Bayelsa State are paid to Lagos State and I don’t want that to continue. When there is consumption of any goods or services from any state it should be calculated and paid to that state.
“Now there is an opportunity to review the tax laws, to correct the anomalies and that is why I’m in support. I know there are states that are feeling that when they apply the new sharing formula, they will earn less. It’s for them to raise those issues and bring the statistics. I don’t go by sentiments. I go by what is right and in the national interest.”
…Oyebode faults revenue mobilisation commission for not leading conversation
Ekiti State Commissioner for Finance and Chair of the Forum of State Commissioners for Finance in Nigeria, Akintunde Oyebode has faulted the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) for not leading the conversation on the contentious tax reform bills.
Oyebode explained in an interview on Arise News on Monday that the RMAFC, as the constitutional body overseeing revenue distribution, should be vocal about its position on the bills.
“The Revenue Mobilisation Allocation and Fiscal Commission should be leading this conversation because constitutionally, they are the body that speaks to revenue distribution, the indices, the methodology, etc.
“So, I think they should take a more frontal position as opposed to an ad hoc committee,” Oyebode said.
On the tax reform bills, which have passed a second reading in the Senate, Oyebode said the country’s tax laws obviously need reform, as Nigeria is still working with tax laws inherited from the British colonial government.
He added that the conversation should not be clouded by ethnic or primordial sentiments.
For him, the bigger issue should be the practice of Value Added Tax (VAT) as opposed to sales or consumption tax.
“So, it’s really a sales tax, because at every layer of the transaction, everybody charges the full amount. I think the question should be, how are we going to ensure that this is actually a value-added tax, which will bring down the overall costs of the tax?” he said.
He noted that what is practiced in Nigeria is a sales tax, but if the country switches from sales tax to VAT, even if VAT increases, as long as it is administered properly, the effect on costs will be less.
“If you also think about the exemptions, in terms of food, critical healthcare, etc., you’ll see that things that really matter in terms of improving the quality of our lives have already been exempted,” he said, adding that the exemptions in the tax reform bills are significant.
“The whole idea here is to reduce what you tax, make it more transparent, and bring more people into the tax net.
“There are lots of companies today that charge VAT to their customers but don’t remit it. So, getting that compliance level up is really the goal of this process,” he said.
Furthermore, he expressed support for the tax reforms, particularly the proposed reduction of Companies Income Tax (CIT) from 30 percent to 25 percent.
According to him, a CIT reduction makes Nigeria a more attractive tax jurisdiction because the country does not exist in isolation.
He said, “Nigeria is a big country, an attractive place that is competing for capital with many other jurisdictions. This requires the country’s regulators to provide a level playing field so that investors will come in.”
“It (CIT reduction) just makes Nigeria a more attractive tax jurisdiction. So, I think there’s an offset here, where you’re saying, we’re going to take CIT down, we’re going to take VAT up, but we’re going to make sure it’s a value-added tax and not a sales tax. So, I think on a net-effect basis, it’s obviously positive.”
However, he acknowledged that there are trust deficits surrounding the tax reform bills and some gaps in the engagement process.
He added that the Presidential Committee on Fiscal Policy and Tax Reforms could have done more to expose the draft bills to various stakeholder groups, such as the Governors’ Forum, Commissioners’ Forum, and the Joint Tax Board—particularly those affected by one of the bills—before the bills went to the National Assembly for consideration.
He said that this is the only gap in the engagement process
