Tax Reform Bills: No provision’ll improverish the North, Presidency clarifies

By Blessing Chinagorom

The Presidency has voiced out over the public debate around the transformative tax bills before the National Assembly which began in the last few weeks.

Saying various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.

According to the statement released by the Special Adviser to the President on Strategy and Information, Bayo Onanuga said 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 polarized one section of the country against another”, he lamented.

Onanuga explained, “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 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 same businesses that are being overburdened with the special taxes”, he said.

The Presidency stated that 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, 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.

The proposal, as contained in section 59(3) of 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”.

He said it’s a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it, adding that none of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.

According to him, “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, avoid misleading the public for any reason. We may be entitled to our opinions, but such views be informed and based on facts, not emotions targeted at inflaming passions”, he added.

Onanuga made it clear that in a period like this, when Nigerians look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, stating that leaders be more measured in their public utterances to avoid heating the polity and polarising the country unduly.

He said President Bola Tinubu welcomes the public interest these bills have generated while encourages leaders across the country, including Governors, Traditional rulers, Civil Society Activists, trade associations, professional associations.

Adding, “Students 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.
“What is never in doubt is the imperative of changing the existing tax laws and that have become obsolete and unhelpful in achieving the growth and development we desire for our country”, he concluded.

Meanwhile, Borno State Governor, Professor Babagana Zulum, on Sunday explained why the northern governors advised President Bola Tinubu to withdraw the controversial tax reform bills.

The governor who appeared as a guest on Channels Television’s Sunday Politics, said the Northern Governors Forum only needs time for consultation according to Vanguard.

He said, “On this tax issue, there are a lot of misconceptions. We felt that the VAT provision in the tax law.

“Based on the calculations that we did, only Lagos and Rivers States will benefit from this scheme. We did our own research and conclude that we would lose,” Zulum said.
According to him, “Why are we in a rush? We advised the Federal Government to take a pause, and expunge some of the clauses that are inimical to not only Northern Nigeria.

“What we are saying is that give more time, let us do a deeper consultation to understand the nitty-gritty of this tax regime before passing it into law.”

Zulum explained that if the bill scales through the National Assembly, states would be shortchanged as only Lagos State would be the main beneficiary of the policy.

He argued that contrary to some insinuations in some quarters, the northern governors are not against President Tinubu’s administration.