The Federal Government’s proposed tax reform bill, spearheaded by President Bola Tinubu, has ignited a heated national debate, with significant opposition from influential northern leaders who fear its potential to exacerbate regional disparities.
Key critics, including former Vice President Atiku Abubakar, Borno State Governor Babagana Zulum, and former Sokoto State Governor, Aminu Tambuwal, have voiced concerns over the bill’s socioeconomic impact on the northern region, already struggling with economic challenges, high poverty rates, and security issues.
Amid growing pressure from northern governors and 73 northern lawmakers, the House of Representatives has indefinitely suspended the debate on the bill.
At the heart of the opposition is the belief that the proposed reforms would disproportionately burden northern states, further deepening the divide between Nigeria’s wealthier south and its economically fragile north.
The debate underscores the broader tension between fiscal policy and the need for equitable development in Nigeria.
The Senate passed on Thursday for second reading, the tax reform bills forwarded to it by Tinubu in October 2024.
Last Wednesday, a mild drama unfolded at the National Assembly when Senate Leader Opeyemi Bamidele sought to suspend rules to allow President Tinubu’s economic team into the chamber, prompting Senator Abdul Ningi to oppose the move, citing the Senate’s procedural guidelines.
Atiku demands transparency
Meanwhile, Atiku, on Sunday, called for transparency and fairness in the National Assembly’s ongoing review of the tax reform bills.
In a statement issued on Sunday, Atiku expressed concern over the uneven development across Nigeria’s federating units, stressing the importance of a fiscal system that ensures justice and equity.
“I have followed the intense public discourse on the Tax Reform Bills with keen interest. Nigerians are united in their call for a fiscal system that promotes justice, fairness, and equity. They have made it clear that the fiscal system we seek must not exacerbate the uneven development of the federating units by favouring a few states while unfairly penalising others.
“As a concerned stakeholder, I firmly believe that transparency and objectivity are essential for promoting accountability, good governance, and public trust in policy-making. The public hearing process must facilitate open and inclusive participation by all stakeholders,” he noted.
Zulum reacts
Zulum warned that the bill could have devastating consequences for the Northern region and other parts of the country.
In an interview with BBC Hausa on Friday, Zulum criticised 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.
Zulum, however, also insisted that if the four tax bills currently undergoing review before the Green Chamber are passed into law, only one of the 36 states—Lagos—will be the major beneficiary.
Debate indefinitely suspended
Meanwhile, the House of Representatives has suspended indefinitely the debate on the Tax Reform Bills earlier fixed for Tuesday following mounting pressure from the 19 northern states’ governors, The TheNigerian 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.’
Tambuwal’s view
On Sunday, Tambuwal criticised Tinubu’s proposed tax reform bill, describing its timing as inappropriate given the economic challenges being faced by Nigerians.
Speaking at an event, 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 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.
“Already, we are facing hardship as 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.”
24 Kano federal lawmakers
Corroborating the position of their state governor, Abba 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.”
This was opposed to an earlier view from a lawmaker from Kano State, Abdulmumin Jibrin, who assured all that both chambers of the National Assembly would pass the bills soon.
Jibrin, who serves as the Chairman of the House of Representatives Committee on Housing and Habitat, made this known during his appearance on the Politics Today programme aired by Television Continental last Sunday.
Tax reform bill explained
TheNigerian Online reports that the tax reform bills are four pieces of legislation aimed at modernizing Nigeria’s tax system.
They include The Nigeria Tax Bill, The Nigeria Tax Administration Bill, The Nigeria Revenue Service Establishment Bill, and The Joint Revenue Board Establishment Bill.
These reforms consolidate existing laws, simplify tax administration, and introduce measures to promote fairness and efficiency.
Key provisions include exempting individuals earning N800,000 or less from income tax, reducing corporate tax rates, and exempting small businesses with turnovers under N50 million from tax.
The bills also aim to harmonise development levies, gradually increase VAT rates, and improve tax collection through technology and financial institutions.
The reforms seek to modernise Nigeria’s tax ecosystem, reduce the burden on low-income earners and small businesses, and enhance economic growth and efficiency.
Legislative battle: Nigerians look on
TheNigerian Online reports that as the nation watches this unfolding debate, the opposition from key northern figures underscores the complexities of tax reforms in a diverse and economically uneven federation like Nigeria.
The outcome of this legislative battle could have far-reaching implications for the country’s fiscal policies and regional unity.
