BREAKING: National Assembly Urged To Withdraw Tax Reform Bills By NEC

The National Economic Council (NEC) has recommended the withdrawal of the Tax reforms bill already at the National Assembly.

The NEC headed by Vice-President Kashim Shettima has governors as members.

Speaking to state House Correspondents after a NEC meeting, on Thursday, Governor Seyi Makinde of Oyo State said following the controversies that arose as a result of the bills, NEC decided to withdraw them so that stakeholders would be carried along.

The latest development comes amid multiple debates surrounding resource control and the distribution of Value Added Tax revenue among states. Many northern states where Sharia law is practiced prohibit the sale of alcoholic beverages but still receive a share of VAT collected from alcohol sales.

In the new tax reform bill, the Taiwo Oyedele-led panel proposed the amendment of the distribution formula to a Derivation-based Model.

The 19 state governors in the Northern region claimed that the proposed model would be at the disadvantage of the northern states and other less industrial regions.

The governors said that VAT is currently remitted based on the location of company headquarters rather than where goods and services are consumed.

They added that the measure will negatively affect the distributed revenue from the Federal Accounts Allocation Committee.

But in a statement on Thursday, presidential spokesman, Bayo Onanuga, said the new proposal, as enunciated in the bill, is designed to create a fairer system that will benefit all states.

Onanuga, the Special Adviser on Information and Strategy to President Bola Tinubu, stated that the ongoing tax reform seeks to correct the inequity in the current derivation model as a basis for distributing VAT revenue.

“While we commend the Governors and traditional rulers for supporting President Bola Tinubu over the success recorded in addressing the country’s security challenges, we consider it necessary to address the misunderstandings and misgivings around the tax reform already embarked upon by the administration,” the statement read.

According to Onanuga, the new policy initiatives are aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.

He explained that the reforms being proposed are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country.

“President Tinubu and the Federal Executive Council recently endorsed new policy initiatives aimed at streamlining Nigeria’s tax administration processes, enhancing efficiency and eliminating redundancies across the nation’s tax operations.

“These reforms emerged after an extensive review of existing tax laws. The National Assembly is considering four executive bills designed to transform and modernise Nigeria’s tax landscape.

“First is the Nigeria Tax Bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.

“Second, the Nigeria Tax Administration Bill (NTAB) proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions for ease of compliance for taxpayers in all parts of the country.

“Third, the Nigeria Revenue Service (Establishment) Bill seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect the mandate of the Service as the revenue agency for the entire federation, not just the Federal Government.

“Fourth, the Joint Revenue Board Establishment Bill proposes the creation of a Joint Revenue Board to replace the Joint Tax Board, covering federal and all states’ tax authorities,” he stated.