- …debunks claims of scrapping key agencies in tax reform
The Presidency has categorically refuted claims that the proposed tax reform bills will undermine the economy of any region, particularly the North.
It rather emphasized that the reforms are designed to streamline tax administration and promote equitable economic development across the nation.
The Presidency has also refuted widespread claims suggesting that the proposed tax reform bills before the National Assembly recommend the dissolution of key federal agencies.
Recent debates surrounding the tax reform bills proposed by President Bola Ahmed Tinubu’s administration have generated significant misinformation, with some critics presenting misleading claims.
There have been claims that the reforms disproportionately benefit states like Lagos and Rivers, potentially impoverishing northern states.
Some northern governors have expressed concerns, particularly about changes in the Value Added Tax (VAT) sharing formula, viewing it as detrimental to their region’s economic stability.
One other prominent allegation is that the bills aim to dissolve key government agencies like the National Agency for Science and Engineering Infrastructure (NASENI), Tertiary Education Trust Fund (TETFUND), and National Information Technology Development Agency (NITDA).
Critics suggested these agencies would lose their funding and cease to operate by 2029, an assertion that the presidency has strongly refuted.
However, the government clarified that the reforms aim to simplify tax administration, reduce the burden on businesses, and ensure equitable revenue distribution among states, with provisions for equalization transfers to maintain fairness.
Another contentious issue is the perceived introduction of excessive taxes amidst existing economic hardships.
Critics argue that these changes might exacerbate the financial burden on Nigerians.
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The government counters that the reforms will exempt many low-income earners from taxation and streamline the taxation process to support vulnerable businesses and individuals.
However, in a statement issued on Monday by Special Adviser to the President on Information and Strategy, Bayo Onanuga, the Presidency said contrary to misinformation, the reforms do not target northern states or prioritize wealthier regions such as Lagos and Rivers.
Instead, the bills aim to simplify Nigeria’s complex tax framework, easing the burden on businesses and fostering an environment conducive to investment and growth.
It also emphasized that no provision in the bills seeks to abolish institutions NASENI, TETFUND, and NITDA.
The Presidency criticized commentators for spreading inaccurate claims and inflaming regional tensions.
According to the statement, the reforms are aimed at improving Nigeria’s economic environment, not at enriching certain states or impoverishing others.
The proposed reforms include consolidating multiple taxes currently imposed on businesses into a single tax, a move intended to simplify tax administration and reduce the financial burden on companies.
The statement highlighted that businesses in Nigeria have long struggled under the weight of numerous taxes, which have hampered growth, deterred investment, and, in some cases, forced companies to relocate to more favorable markets.
Under the new framework, affected agencies such as NASENI, TETFUND, and NITDA will continue to receive funding through budgetary allocations and a phased sharing of the consolidated tax revenue until 2030.
This approach, the Presidency argued, is consistent with global best practices, where government agencies are funded through general taxation rather than earmarked levies.
The statement urged public figures and stakeholders to base their comments on factual interpretations of the bills, rather than using unfounded claims to polarize the nation or mislead citizens.
It called on all Nigerians, including leaders in various sectors, to contribute constructively during upcoming public hearings organized by the National Assembly to discuss the tax proposals.
President Bola Tinubu reiterated the urgency of reforming Nigeria’s outdated tax system to foster economic growth and development.
According to the statement, the proposed changes are essential for creating a more competitive and equitable economic landscape for all Nigerians.
“Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.
“Unfortunately, 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.
“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 the 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 the same businesses that are being overburdened with the special taxes.
“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 and 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 the 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.
“It is a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it. None of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.
“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 and avoid misleading the public for any reason. We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
“In a period like this, when our people across the country look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, leaders should be more measured in their public utterances to avoid heating the polity and polarising the country unduly.
“President Tinubu welcomes the public interest these bills have generated. He encourages leaders across the country, including Governors, Traditional rulers, Civil Society Activists, Students, trade associations, professional associations, 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 administration that have become obsolete and unhelpful in achieving the growth and development we desire for our country”, the statement said.
