National Assembly Divided Over Tinubu’s Tax Reform Bills

The National Assembly is currently split over President Bola Tinubu’s new Tax Reform Bills, which have stirred debate since they were introduced on September 3. These bills, stemming from recommendations by the Presidential Committee on Fiscal and Tax Reforms led by Taiwo Oyedele, aim to overhaul Nigeria’s tax laws.

The proposed legislation includes the Nigeria Tax Bill 2024, designed to establish a comprehensive framework for taxation, and the Tax Administration Bill, which seeks to clarify tax guidelines and minimize disputes. Additionally, the Nigeria Revenue Service Establishment Bill aims to replace the Federal Inland Revenue Service with a new Nigeria Revenue Service, while the Joint Revenue Board Establishment Bill would create a tax tribunal and ombudsman to oversee taxation matters.

A key aspect of these bills is the proposed shift to a derivation-based Value Added Tax (VAT) model, which would allocate tax revenue based on where goods and services are consumed rather than where businesses are headquartered. This proposed change has sparked opposition from northern governors, who, through the Northern Governors’ Forum, expressed concerns that the bills do not align with the interests of the North and other regions.

The National Economic Council, led by Vice-President Kashim Shettima, also recommended withdrawing the bills to allow for broader consultation.

Though the bills have yet to reach a second reading, some lawmakers have voiced strong opinions. Senator Ali Ndume (APC, Borno South) has openly opposed the bills, pledging to rally northern lawmakers against them. Senator Ogoshi Onawo of Nasarawa South criticized the timing, calling for the government to reconsider, especially as citizens face economic hardship. He argued that new taxes without corresponding improvements in social services would only burden Nigerians further.

“A tax policy can only be effective if citizens see tangible benefits,” Onawo said, “but taxing people without providing basic amenities is unfair.”

In contrast, lawmakers from the South-West have defended the reforms, arguing that a revamped tax structure is essential. Babajimi Benson, a representative from Ikorodu Federal Constituency in Lagos, argued that the current tax framework has underperformed and that new measures could enhance revenue collection.

A North-Central senator, who requested anonymity, assured that Nigerians would have an opportunity to voice their concerns and that any tax changes would reflect the interests of all citizens.

As the National Assembly debates the bills, the outcome will likely hinge on balancing regional interests with the pressing need for tax reform in Nigeria.