Tax reform: Senate suspends debate, panel meets AGF today
The Senate has suspended action on the Tax Reforms Bills. The Senate further instructed its Committee on Finance to stay action on the public hearing pending the time the agitation in the public space was addressed.
It further constituted a special committee to meet with the executive arm and work with the Federal Government to resolve the issues surrounding the Tax Reform Bills.
This was made known by the Deputy Senate President, Jibrin Barau, who presided during plenary on Wednesday.
There has been controversy over the Tax Reform Bills since its introduction to the National Assembly.
The bills are Tax Reform Bills comprising the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024 and Nigeria Tax Bill, 2024.
The northern Governors rejected the bills outright, describing them as anti-democracy.
Following this, the National Economic Council, Nigeria’s highest economic advisory body, requested that the tax reforms bill be withdrawn from the NASS for more consultations.
Oyo State Governor, Seyi Makinde, announced the council’s position after its 144th meeting chaired by Vice President Kashim Shettima at the State House, Abuja.
Makinde said council members agreed that the bill be withdrawn as some sections of the country are uncomfortable with some of its sections. He said this would allow for consensus building and understanding.
Following the various controversies that greeted the bills, the Senate on Wednesday invited the president’s Economic team led by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, alongside the Chairman of the Federal Inland Revenue Tax, Zacchaeus Adedeji, Director General of the Budget Office, Tanimu Yakubu, into plenary to explain the Tax Reform bills in detail to lawmakers.
After the interaction with the President’s economic team, the Senate passed the bill for a second reading and transmitted it to the Senate Committee on Finance.
After the passage of the bill, the Borno State Governor, Prof Babagana Zulum, accused Oyedele’s team of rushing the enactment of the tax reforms, alleging that the bills are accompanied by misconceptions that require deeper consultations.
“On this tax issue, there are a lot of misconceptions. We felt that the VAT provision in the tax law, based on the calculations we did, would only benefit Lagos and Rivers States. We did our research and concluded that we would lose,” Zulum said.
“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 Northern Nigeria. What we are saying is, give more time, let us do a deeper consultation to understand the nitty-gritty of this tax regime before passing it into law,” Zulum added during an interview on Channels Television.
Amidst the controversy, Senator Shehu Buba (APC, Bauchi South), in an interview with the British Broadcasting Service Hausa Service said northern Senators agreed to recall the Tax Reforms Bills.
He said, “These bills are complex and require thorough review by tax policy experts.”
He claimed that northern lawmakers strongly oppose the proposed “derivation” formula in the value-added tax distribution system, arguing that northern states would be unfairly impacted.
Also on Tuesday, the President instructed the judiciary to liaise with the legislative arm of government.
Speaking on the controversies, the Deputy Senate President noted that the delegation would meet on Thursday at the National Assembly to resolve all the issues that had caused the uproar.
Barau said, “On the tax reform bills currently before us, we acknowledge that the Senate remains the highest legislative assembly in this country.
“The Senate comprises men and women of wisdom and experience, entrusted to legislate for the peace, stability, and development of the nation.
“The Senate of the Federal Republic of Nigeria, like similar bodies globally, serves as a stabilising force in times of difficulty or disagreement. Through dialogue and consensus, the Senate has consistently provided solutions to national challenges since 1999.”
He added, “In this regard, we have decided to set aside politics, ethnicity, and regionalism to work together on resolving the issues surrounding the tax reform bills.
“In collaboration with the Executive Arm of Government, we agreed to establish a forum to identify and address contentious areas to ensure national unity and progress.
“Before the introduction of these bills, we faced numerous challenges, including insecurity and economic issues.
“The President has been working to address these problems, and we are committed to supporting these efforts while tackling global economic challenges. We also agreed that no other issues should aggravate the country’s current difficulties.”
On Tuesday, following the controversy emanating from the bills, President Tinubu directed the Ministry of Justice to work closely with the National Assembly to address “grey areas” concerning the bill with the legislature.
The Minister of Information and National Orientation, Mohammed Idris, stated this in a statement titled ‘President Tinubu committed to accountability on tax bills, directs Ministry of Justice to work with NASS on concerns.’
Mohammed said, “In line with the established legislative procedure, the Federal Government welcomes meaningful inputs that can address whatever grey areas there may be in the bill.
“In this vein, President Tinubu has already directed the Federal Ministry of Justice and relevant officials who worked on the drafts to work closely with the National Assembly to ensure that all genuine concerns have been addressed before the bills are passed.”
Barau confirmed that the Senate committee would meet with the Attorney-General of the Federation on Thursday (today).
“It has been mutually decided between the Executive and the Senate to engage the Judiciary to sort out these matters.
“The Attorney-General of the Federation will be involved in discussions to identify and resolve areas of disagreement for the nation’s benefit.
“Tomorrow (today), the committee established by the Senate, along with its leadership, will meet with the Attorney-General to address these issues.”
Barau added, “Consequently, the Senate Committee on Finance has been directed to pause further actions on public hearings and other matters related to the tax reform bills until the issues are resolved.”
However, there are indications that the Attorney-General of the Federation and Minister of Justice, Lateef Fagbemi (SAN), may not be present to attend the meeting on the tax reform bill slated for today.
A senior official at the Ministry of Justice confirmed to our correspondent that the AGF was out of the country and billed to return today.
The source said, “The AGF is not in the country at the moment but he will return tomorrow (today).”
In his response, chairman of the Senate’s special committee, Abba Moro, said they might not meet with the AGF, but added that the lawmakers would definitely hold a meeting amongst themselves.
He said, “Since the AGF is out of the country as you said, and as contemplated by the senate, it might not hold.
“However, the committee will certainly meet to chart the way forward. We will not like to keep Nigeria and Nigerians waiting for too long for answers to their questions.”
It was, however, learnt that the AGF’s team might meet with the senators to begin talks on how to resolve the tax bills concern.
The committee is constituted by the leadership of the Senate, as well as other members –Adamu Ailero (PDP, Kebbi Central), Orji Kalu (APC, Abia North), Seriake Dickson (PDP, Bayelsa West) Titus Zam (Benue South), Abdullahi Yahaya (Kebbi), Adeola Olamilekan (APC, Ogun West), Sani Musa (APC, Niger East) and Adetokunbo Abiru (APC, Lagos East).
Meanwhile, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said the need to pass the Tax Reforms Bills was “urgent” because of the struggles of most Nigerians.
Oyedele made this statement during an Arise News interview monitored by our correspondent on Wednesday, in response to comments made by Borno State Governor, Prof Babagana Zulum, on the proposed bills.
He also stated that the proposed 60 per cent derivation was the only way to promote more equity in the sharing of VAT while promoting economic activities across Nigeria.
Responding to Governor Zulum’s comments that the bills were rushed, Oyedele stated that everyone, including the governor, “needs to acknowledge that we are at a stage where the majority of our people are struggling and are in multi-dimensional poverty.”
“Our small businesses are dealing with over 60 official levies, taxes and over 200 unofficial ones. We are struggling to have people just feed because inflation is escalating.
“We have people who don’t have decent jobs. That’s why the poverty rate is high, even though officially they say the unemployment rate is low. We are dealing with all these issues.
“If you want to provide relief for your people, you should do it quickly because it’s urgent. It’s an emergency. The way we should respond to these issues should be similar to how the world responded to COVID-19.”
“There were countries where laws were passed within two days because it was an emergency. We are not even doing it in two days. We have been working on this for over a year,” he said.
Oyedele explained that his team had a session with the governors around May, sharing drafts with them.
“We had engagement with the governors themselves but you would imagine that if you manage to get airtime with them, they are unlikely to give you one hour or two. There was a particular meeting we had for 15 minutes.
“And I said jokingly to the governors that I don’t expect your excellency to read all these details because we have also shared them with your technical people.
“But we have done all of that. The bills are now in the National Assembly. As we speak, the bills have been there for over a month already. So, I don’t think that’s rushing it,” he said.
He added that there is no rush, as the bills are currently before the National Assembly and have remained under scrutiny for one month.
However, he emphasised that stakeholders should work to finalise the bills quickly so that relief could be provided for Nigerians.
“We are always happy to engage more, but we think that what is happening now is healthy and good for our development because there is more attention now to this issue, which means an opportunity to further engage.
“Because of the inequity that we are going to correct, we hadn’t envisaged that this was going to be a pushback from other states. We thought the pushback would come from Lagos State and Rivers State because that was what the data we had was saying to us. It’s almost like we ended up with, the people we are fighting for are now fighting us. Probably if we knew where the pushback is from, we would have engaged more,” he added.
