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  • Tax reforms: Only few Nigerians have studied the bills – Katsina APC chieftain

    Tax reforms: Only few Nigerians have studied the bills – Katsina APC chieftain

    A prominent chieftain of the All Progressives Congress (APC) and Katsina-based industrialist, Alhaji Salisu Mamman, has stated that only a few Nigerians have studied the four bills that make up the tax bill recently submitted to the National Assembly by President Bola Ahmed Tinubu.

    Speaking in an exclusive media interview with The Nation in Katsina, Mamman described the economic and tax reforms of the current administration as “long overdue.”

    He said: “The issue of economic and tax policies of President Bola Ahmed Tinubu’s policies has become  subjects of national contention in recent times, the fact however remains there is need for te reforms.

     ’’In fact, its part of human endeavour, even you as an individual, not to talk of government, at every point in time, you have to embark on one form of reform or the other, because reforms, as defined, were supposed to translate into changes or anything that will impact positively on the lives of the people.

    ‘’Certainly, reforms were ‘’sine quano to the society, a sine qua non to human endeavor, it’s something that you cannot do without. 

    “They were necessary evils, necessary things that one has to do, depending on from which prism one is looking at those reforms. So this is the circumstances. Unfortunately, we found ourselves on these four bills that Mr. President has presented before the National Assembly.

    He further described Nigeria’s current economic challenges as seen by several opinions, cutting across public, religious, regional, sub-national prisms with divergent opinions, as healthy for democracy adding no one should be shut out from the discourse

    He said: ’’This is not military decrees or military regime, where the Supreme Military Council decides it all, even during the military, you have the Supreme Military Council sitting to promulgate a decree.

    “So, whatever happens, even during the military era, you have some divergent or conglomeration of other opinions of some other people. Yeah, it may be a military government that, okay, the decision is only taken by let’s assume 12 or 15 people. You can imagine 10 or 15 people taking decisions on behalf of 200 million people.

    Read Also: Tinubu urges media support for tax reforms to ensure national prosperity

    ‘’People can say their mind. People can bear their minds on any given situation and express themselves. Democracy heralds the expectations that leadership and democracy will listen to the divergent opinions as expressed’’

    ‘’The funny thing in the raging argument on the tax reform bills, are that people are expressing their opinion based on their own understanding of what they have heard, not what they have read about the tax reforms.

    ‘’it is becoming clearer now that most people have not even gone through or taken time to read the content of the tax reform bills’.

    ‘’They rely on speculation, on hearsay. They rely on conjectures. They rely on what somebody has said nobody cares to go and start reading the 361 pages. No one cares to even know that what is before the National Assembly are four bills.”

  • Tinubu urges media support for tax reforms to ensure national prosperity

    Tinubu urges media support for tax reforms to ensure national prosperity

    President Bola Tinubu has appealed to the media to back his administration’s proposed tax reforms, highlighting their role as the cornerstone for long-term national wealth and prosperity for all Nigerians.

    The president’s message was delivered by the Minister of Information and National Orientation, Mohammed Idris, during the 2024 Nigerian Media Merit Awards (NNMA) on Sunday evening at the Muson Centre in Lagos.

    While acknowledging differing views on the proposed reforms, President Tinubu emphasized the collective recognition of the urgent need to revamp the nation’s tax administration system.

    “I will say with every sense of conviction that our policies are deliberate and well-thought-out. We are headed toward the restoration of Nigeria, on a path requiring a comprehensive approach that addresses economic diversification, human capital development, infrastructure development, wealth creation, and inclusive growth,” he said.

    He further noted: “Among our various landmark reforms is the one focused on tax, by far one of the most profound steps necessary for setting Nigeria onto the path of enduring national wealth and prosperity for all our people. There is a consensus that the tax administration system in Nigeria requires reform. We may not all agree on every detail of the required reform, but there will be many areas of convergence.”

    President Tinubu explained that the proposed tax bills before the National Assembly are designed to streamline the number of taxes, reduce the burden on vulnerable Nigerians, increase states’ share of tax revenue, and promote business growth through targeted incentives. 

    These reforms, he stated, are integral to the broader Renewed Hope Agenda, which includes measures such as subsidy removal, exchange rate unification, and tax restructuring.

    “These bold but necessary steps are designed to free resources and redirect them toward economic growth, infrastructure development, and human capital advancement,” he remarked. Highlighting recent progress, he shared. 

    “Just days ago, the Federation Accounts Allocation Committee recorded the highest-ever revenue distribution figure in the history of our country. These are the much-needed resources being freed up for investment in critical areas of the economy.”

    The president outlined some of the initiatives funded by these revenues, including the consumer credit scheme, student loan fund, presidential grants and loans, the MSME clinics, the 3 million technical talent programme (3MTT), the presidential CNG initiative, and large-scale road infrastructure projects. He noted that states and local governments also have complementary programs in line with their roles in the federation.

    In addition, President Tinubu highlighted efforts to secure financial autonomy for local governments, the closest tier of government to the people. He called on the media to enhance public understanding of these reforms and counter misinformation, emphasizing their pivotal role in shaping narratives.

    Read Also: BREAKING: Tinubu presides over FEC meeting at the Villa

    “My administration is committed to ensuring that the fundamental rights of the press are guaranteed. It is in the interest of Nigeria and her fledgling democracy that the media and civic spaces are protected at all times. 

    “This guarantee of media freedom comes with the associated obligation to exercise responsibility in the exercise of that freedom, especially in this digital age with its unstoppable viral mechanisms that sadly appear to favor falsehoods more than truth,” he said.

    Expressing gratitude for the contributions of Nigerian journalists to the country’s democracy, President Tinubu congratulated the NNMA award winners and reaffirmed his administration’s commitment to press freedom. 

    He praised Nigerian journalists, both at home and abroad, for their courage, determination, and excellence in the profession, noting their consistent achievements in winning awards and global recognition.

  • It is not just about Tax reforms, it is also about Fiscal Reforms

    It is not just about Tax reforms, it is also about Fiscal Reforms

    “A nation is great not by its size alone. It is the will, the cohesion, the stamina, the discipline of its people and the quality of their leaders which ensure it an honorable place in history.”- Mr. Lee Kuan Yew – the First Prime Minister of Singapore.

    As the controversy, and debates continue to rage on with regard to the Fiscal Policy and Tax Reforms Bills before the National Assembly of the Federal Republic of Nigeria; most Nigerians including the political leaders (strangely so) are more fixated on the Value-Added Tax (VAT) part of the reform, such that we may end up throwing away the baby with the bathwater if we allow the Bill to fail to go through the proper legislative process. Because, it appears as if the politicians that are against the Bill are almost succeeding in diverting the attention of Nigerians from other very important aspects of the Bill, as a deliberate ploy to “kill” this landmark proposal.

     Let me remind you that the proposed reform is not just about VAT. There are other very important elements of the Bill that include a new fiscal policy on how our collective resources will be better managed with better accountability and prudence.

    The key components of the omnibus Bill include:

    1.  Nigeria Tax Bill (Income Tax, VAT, Excise and Stamp Duties, etc.)

    2. Tax Administration Bill (Registration, Filing, Assessment, Payments, Technology in Tax Administration)

    3. Nigeria Revenue Service (Establishment) Bill

    4. Joint Board Bill (Establishment), Bill (Joint Revenue Board, Tax Appeal Tribunal, Tax Ombudsman Office)

     The above-mentioned Bills are key to the reform of Nigeria’s National Fiscal Policy. The National Fiscal Policy outlines how national income will be spent by Governments in terms of priorities for example health, education, living standards, employment, security, infrastructure, etc.

    The Nigeria Revenue Service as a Critical Success Factor of the Reforms

    It is also worthy of note that the Nigeria Revenue Service Bill is crucial to the entire Fiscal Policy and Tax Reform, i.e. 1,2,4, and 5 listed above. If passed into law, the Nigeria Revenue Service will streamline our entire national tax and revenue collection governance framework, block leakages, remove red-tapism, eliminate multiple taxation, and achieve transparency and accountability by providing a system that will be more efficient, effective, and impactful. This will be the game changer for Nigeria’s economic transformation.

    SOME KEY POINTS TO NOTE

     Why should political leaders in the executive and legislature refuse to review or evaluate a proposal? A proposal is not yet law or sacrosanct, and since Nigeria is a democracy what is the job of the legislature if not to evaluate Bills (proposals) and effectively pass or reject them? Therefore, it is not strategic for a section of the country to out-rightly reject a proposal without reading it while other parts of the Country are reading, evaluating, and taking a common position.

    Indeed, it is in the best interest of Northern Nigeria, if we, as northerners, assert ourselves based on reason, logic, and strategy, but not based on the deception of some politicians who only cry wolf when things are not serving their vested interests. What is even more worrisome is that it appears as if they have also been able to hoodwink/ trick some of the intellectual academics, and Islamic clerics in northern Nigeria into believing them.

    Henceforth, we should be suspicious of the antics of politicians who most times throw the citizens under the bus so long as they get what they want, and I can give many examples! Northern Nigerians should not suffer selective amnesia of the behavior of our political leaders at this critical moment in our political history, if we do so then it will be at our own peril!

    Governors have suddenly become selective Activists:

    I have also noted the recent changing in tones of some of the Northern Governors stating that the Bill is a wonderful Bill, only that there is a need for more consultation in areas some areas, which is a clear departure from their position of the last two weeks; when the Governors’ position was that President Bola Tinubu should withdraw the Bill from the National Assembly for “further Consultations”. My position, as it is the position of some notable Nigerians, is that this consultation should have been ongoing for the past 1 year since the inauguration of the Presidential Committee on Fiscal Policy and Tax Reforms; but better late than never. In my view, this consultation could still continue as part of the legislative process. Notwithstanding, I commend President Tinubu for directing that the Ministry of Justice should engage critical stakeholders to address key concern areas as consultations continue.

     When the Petrol (PMS) subsidy was removed last year by Mr. President, the Governors and legislators loudly accepted the change, as the Governors were collecting almost double the monthly FAAC allocations to the respective States with no significant impact to show the citizens in most of the states across Nigeria especially the North, except for a few outstanding Governors. When Mr. President was approving Hundreds of Billions of Naira almost every Quarter since he came into office last year, as palliative interventions to all the States across Nigeria and FCT; to cushion the effect of subsidy removal and other natural disasters, the governors have been collecting the huge sums of money with no transparency, accountability, or tangible impacts by most governors including those in the north.

     But when Mr. President secured autonomy for Local Governments in Nigeria vide the Supreme Court judgment, a lot of the State Governors kicked against the development, for the obvious reasons that they didn’t want to hands-off the local governments’ financial allocations/ financial autonomy; which amounts to about 25% of the total national income – which a lot of the Governors have been misappropriating for decades! Some former Governors are facing prosecution for misappropriation of state funds.

     Furthermore, 19 State Governors (though 3 withdrew), most of them from northern Nigeria, went as far as going to the Supreme Court to dissolve the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences (ICPC), and the Nigerian Financial Intelligence Unit (NFIU); which was clearly an attempt to kill the anti-corruption war in Nigeria for obvious reasons.

     As if that was not enough, some of the Governors and their co-travels in the legislature are now behaving like Civil Society Activists for the “good of their people”, simply because the Fiscal Policy and Tax Reforms will sanitize the Fiscal space of governance and bring about more transparency and accountability, bloc leakages, move some of the VAT funds from the control of the state governors to empower the local government, etc. So, Northern Nigerians should “shine their eyes” and read in between the lines.

     Apart from increasing Tax Collections, the reform will transform the entire fiscal policy direction and will lead to better Fiscal Discipline. Unless there is Fiscal Discipline, monetary and fiscal policies will not be effective and consequently Nigeria will not get out of the socio-economic doldrums.

    Read Also: INEC to seek amendment to Electoral Act 2022 over election results transmission

    However, it is worthy of note that there are some key governance imperatives that are critical to the achievement and sustenance of the social and economic objectives of the Fiscal and Tax reforms, which include:

    •Quintessential leadership at the top

    •Cutting/ containing the cost of governance

    •Prudence in government spending at the top, across, and to be cascaded down the structure and system of governance

    •Blockage of leakages in the entire government (Federal and State levels). Because the more you get money and throw it into a bottomless purse, you cannot retain anything. Therefore, if we do not take seriously the issues of leakages/ wastages and prudence and Government behavior with regard to governance.

    •Sincere, objective, result-oriented, and transparent fight against corruption. Because if we do not deal with these fundamental issues, all the objectives of the reforms will not be achieved.

    •Zero tolerance by Mr. President for non-performance by the regulatory agencies/ agents that are found to be in cahoots with the culprits that allow our revenues or incomes to leak away which is a form of economic sabotage.

    •Zero tolerance to non-performance across all MDAs

    •Total stoppage of budget padding between the Executive arm and the legislative arms of government at federal and sub-national levels, whereby, according to the Independent Corrupt Practices and Other Related Offences Commission (ICPC); in the 2021 budget, a budget padding of about N300 Billion was inserted in the Budget, while a budget padding of about 100 Billion was inserted in the 2022 budget by MDAs.

    •In the case of the Private Sector, for the Government to ensure that those in Government who play with operators in the private sector circumvent the system to help “big businesses”, including the multinationals who do not pay tax or undercut the tax they pay and rein-in our revenue.

    •Zero tolerance to all forms of economic sabotage

     I hope that the consultations and robust debates will lead to the passage of excellent Fiscal Policy and Tax reform laws that will be in tune with the yearnings and aspirations of Nigerians and Nigeria. God Bless the Federal Republic of Nigeria.

  • Tax Reforms: Oyedele allays fears of funds mismanagement

    Tax Reforms: Oyedele allays fears of funds mismanagement

    • …says RMAFC has nothing to do with VAT

    The Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Dr Taiwo Oyedele, on Wednesday, allayed fears of Nigerians that funds generated from the Valued Added Tax (VAT) as proposed in the bills being considered by the National Assembly, would be mismanaged by government at the Sub regional levels.

    Oyedele said rather than mismanagement, the proposed tax reforms bills had made specific provisions for what the VAT proceeds should be spent on.

    He also said that the role of the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has nothing to do with VAT because it is not part of revenues captured in the nation’s constitution.

    Oyedele made these assertions when he spoke at one-day roundtable on the tax reform bills organised by the National Institute for Legislative and Democratic Studies (NILDS) in Abuja.

    He said since the bills contained a framework for how to generate taxes and how to spend it, no governor or local governor authority in the country would spend VAT on white elephant projects.

    Oyedele said: “We have a document we call the National Fiscal Policy that speaks to our principles and framework as a country around taxation; who should pay tax, how much should they pay, how should they pay, among other issues.

    “We have another framework for spending. How should we spend our money? What should be the priority, and the quality of spending. 

    “For example, there are more than 15 airports in Nigeria today built by different states that should not have been built because they were not necessary.

    “We have states with flyovers where they have no traffic. They’ve never had a traffic jam in those places since the states were created.

    “We have states with malls where people don’t go there, but they have built those malls, even though they have no primary schools with roof and  books.

    “They have no health centres. They have no road from the farm to the market. This is a misplaced priority.

    “We know the priorities of our people. They are in multidimensional poverty. The four dimensions of poverty is education, health, living standard, insecurity, and unemployment.

    “That’s what should be our priority as well. So we’ve stated that clearly in our national fiscal policy. We also have the framework and policy around borrowing.

    “What should you borrow for? If you’re borrowing dollars, how should you spend it in Naira? Should you even borrow  dollars to do Naira investments?

    “Should you borrow and spend it on overhead? Or should it be only infrastructure? What qualifies as infrastructure? What should you subsidize?

    “Why is it that it’s the train that we are subsidizing? To the extent that today the money we make from running train services is not enough to pay the interest on the loan.

    “What’s going to happen is predictable. Because very soon you will suffer budgetary allocations, you suffer funding, and infrastructure will be abandoned.

    Read Also: No Inheritance Tax in Nigeria’s Tax Reform Bills – Taiwo Oyedele

    “Even though we borrowed in hundreds of millions of dollars. This framework is also in our fiscal policy, including conditional cash transfer as subsidy.

    “Should we subsidise anything as a country? If yes, what should we subsidise and how? Is it production? Is it consumption? Is it agriculture? Is it manufacturing? Is it everybody or just the poor?

    “When you are doing conditional cash transfer, how should you do it? It’s there.”

    Oyedele said those who are saying the committee did not carry RMAFC along did not study the constitution very well.

    “The role of RMAFC  is to determine formulas for distributing revenue. Our view is that VAT is not in the constitution.

    “Section 162 of the constitution, that speaks to the role of the RMAFC as advisory, is focusing on federation revenues. So this VAT is actually state revenue. And that’s why when the military decreed it in 1993, it replaced the sales tax that states were collecting.

    “That is the reason why VAT does not go to the regular federation accounts. It goes to a special pool accounts, then we share it to states and their local governments.

    “The Federal Government keeps a small portion for administering needs and also recognising that if we were to collect VAT by state level, the Federal Government will be entitled to Import VAT, International VAT, and interstate VAT.

    “In fact, if we start collecting VAT at state level, you know the biggest winner will be the federal government. The federal government will keep more than half of the VAT we are collecting today.”

    Oyedele also described as false, claims in some quarters that the Federal Inland Revenue Service planned to import the Alpha Beta Company from Lagos to serve as tax consultants to the FIRS.

    He specifically said the proposed bills banned the FIRS from engaging tax consultants unlike if the states are allowed to be collecting VAT.

    He said, “If the states are collecting VAT, the next winner will be tax consultants. Some companies will file 36 returns every day with complications. As consultants, we make more money.

    “Some people said, you guys are planning to use consultants, maybe you want to bring Alpha Beta to the centre.

    “I just laughed and said, how do people come up with these ideas? Because you would never have thought about them until somebody makes up the story.

    “The FIRS has no need whatsoever for consultants to be able to collect VAT.

    “In fact, inside those tax bills, there is a specific language that says, the FIRS cannot hire consultants to do assessments, they cannot hire them to do collection, they cannot hire them to do any work that is a routine work of the tax officers.”

    Senate President, Godswill Akpabio, who was represented by Senator Victor Umeh, at the session, said the Tax Reform Bills before the National Assembly represent a critical step forward in modernising the country’s tax system and ensuring a more equitable distribution of the tax burden among all Nigerians.

    He said the bills aim to enhance efficiency, improve revenue generation, and ultimately, build a stronger, more prosperous Nigeria for all.

    He said, “Regrettably, the introduction of these bills has been met with some misunderstanding and even politicization by certain segments of our society.

    “Don’t see this as a setback, but rather as a testament to the growing democratic maturity of our nation.

    “As people’s representatives, we want to assure our compatriots that the members of the National Assembly have heard your voices.

    “We stand here, not as adversaries, but as partners in the quest to build the Nigeria of our dreams.

    “We know that we have the unwavering trust of the Nigerian people, and we will never, ever, betray that sacred trust in the performance of our duties.”

    The Director General of NILDS, Professor Abubakar Sulaiman, said contrary to the fears expressed in some quarters, the bills are designed to reduce the burden of taxation of all people by the government.

    He said it would make the tax system more progressive and less regressive and simplify the tax system, by making it more accountable and understandable.

    He said, “While the tax reform bills have garnered an unprecedented level of public scrutiny, the controversies surrounding the bill underscore the realization by the Nigerian people that there is a need for a fair and balanced tax system that mirrors the specificities of the Nigerian society.”

  • Tax reforms will reinvigorate Northern economy – Experts

    Tax reforms will reinvigorate Northern economy – Experts

    A group of experts from Northern Nigeria has backed the Tax Reform Bills proposed by President Bola Tinubu, saying they will reinvigorate the northern economy.

    The experts, who spoke as resource persons in a town hall meeting in Abuja organised by 200 civil society organisations, refuted  claims that the bills are anti-north and are rather geared towards the development of the region.

    Dr. Mustapha Abubakar, a chartered accountant said the Tax Reform Bills are designed to expand Nigeria’s tax base, improve compliance and establish sustainable revenue streams.

    “The bills are expected to have a positive impact on the northern economy, potentially increase government revenue, reduce poverty, and promote economic growth and development,” Abubakar said.

    “One of the key benefits of the bills is the potential to increase revenue generation for state and local governments in the north. The proposed reduction of VAT distribution to the federal government from 15% to 10% and the increase in the share of state governments from 50% to 55% will result in more funds being available for development projects in the north.

    Read Also: 50 ways Nigerians can benefit from Tax Reforms  

    “This is expected to lead to improved infrastructure, education, and healthcare in the region. Another significant benefit of the tax reform bills to the north is the potential to promote economic growth and development.

    “The proposed reduction of company income tax from 30% to 25% over two stages will make it easier for businesses to operate in the north, leading to increased investment and job creation.”

    Barrister Maxwell Batusan of the Kano state Internal revenue service another expert at the meeting, noted that the bills will promote synergy between the federal, state and local governments.

    “The Joint Revenue Board Establishment Bill intends to establish the Joint Revenue Board, which will streamline tax administration and promote fairness and equity in the distribution of revenue,” Batusan said.

    “Additionally, the exemption of small businesses with annual turnovers of N50 million or less from paying income tax will provide a boost to entrepreneurship and innovation in the region.

    “Overall, the tax reform bills have the potential to unlock the economic potential of the north and promote sustainable development in the region.”

    The event was chaired by Prof  Malfouz Adedimeji, Vice Chancellor African School of Economics ( Pan-African University of Excellence Abuja)

    The town hall meeting was organised by the Coalition of Northern Civil Society Groups in collaboration with Concerned Northern Professionals.

  • 50 ways Nigerians can benefit from Tax Reforms  

    50 ways Nigerians can benefit from Tax Reforms  

    Taiwo Oyedele, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has listed ways Tax Reforms will benefit Nigerians.

    Through a post on his X account on Monday, December 9, Oyedele highlighted ways households and individuals including the youth, small businesses, businesses and investments, high income earners and HNIs and subnational governments can benefit from the reforms.

    According to Oyedele, there is something in the tax bills for everyone.

    Here are ways you can benefit from tax reforms:

    A. Households and individuals including the youth:

    1. Complete exemption of low-income earners up to N1m p.a. (about N83k per month) from PAYE

    2. Reduced PAYE tax for those earning a monthly salary of N1.7m or less

    3. Zero (0%) VAT on food, healthcare, education, electricity generation and transmission

    4. VAT exemption on transportation, renewable energy, CNG, baby products, sanitary towels, rent and fuel products

    5. Tax break for wage award and transport subsidy to low-income earners

    6. Tax incentives for employers to hire more people incrementally than in the previous 3 years

    7. Exemption of stamp duties on rent below N10m

    8. PAYE tax exemption for other rank and armed forces fighting insecurity

    9. Friendly tax rules for remote workers and digital nomads

    10. Clarity on taxation of digital assets to avoid double taxation and allow deduction for losses

    B. Small Businesses:

    1. Increase in tax exemption threshold for small businesses from annual turnover of N25m to N50m

    2. Exemption from company income tax for small businesses (tax at 0%)

    3. No withholding tax deduction on business income of small businesses

    4. Exemption from the requirement to deduct and account for tax on payments to vendors

    5. Simplified statement of accounts attested to by small business owner for tax returns in place of audited financial statements

    6. Introduction of the Office of Tax Ombud to protect taxpayers against arbitrary tax assessments

    7. Tax disputes affecting businesses to be resolved within 14 days by the Tax Ombud

    8. Harmonisation of taxes and repeal of multiple levies

    9. Outlaw cash payment and physical roadblocks imposing burden on businesses

    10 Attractive tax regime to encourage formalisation of business and facilitate growth

    C. Businesses and investments:

    1. Reduction of corporate income tax rate from 30% to 25% and harmonisation of earmarked taxes at a reduced rate

    2. Unilateral tax credit for income earned abroad to avoid double taxation and input VAT credit on assets and services to reduce cost of production.

    Read Also: Need for equality, equity and fairness in tax reforms

    3. Introduction of economic development incentive for priority sectors

    4. Friendly tax regime for business restructuring and reorganisation to improve efficiency

    5. Clarity on 6-years statute of limitation and resolution of objections in favour of taxpayer if tax authority fails to respond within 90 days

    6. Option to pay taxes and levies on foreign currency denominated transactions in Naira

    7. Faster tax refunds within 90 days (30 days for VAT refunds) with the option of set-off against any tax liability of the taxpayer.

    8. Request for advance ruling by taxpayer to be provided by tax authority within 21 days

    9. Expense incurred by a start-up within 6 years pre commencement of business to be tax deductible

    10. Restriction of interest deduction will only apply to related party loans in order to reduce cost of finance for businesses

    D. High Income Earners and HNIs:

    1. Tax exemption on personal effects not exceeding N5m, sale of dwelling house, and up to two private vehicles

    2. VAT exemption on purchase of real estate

    3. Clarity on taxation of benefit in kind and limit of taxable accommodation benefit to 20% of annual income

    4. Exemption of tax on sale of shares up to N150m and gains not exceeding N10m

    5. Progressive personal income tax rate up to 25% for HNIs

    6. Tax exemption on compensation for loss of employment not exceeding N50m

    7. Progressive VAT rate on items mostly consumed by high income earners to partly compensate for exemption on essential consumptions

    8. Tax exemption for income earned on bonds issued by states in addition to federal government bonds

    9. Reduction in corporate tax rate for businesses and tax break for hiring more people

    10. Exemption of tax on bonus shares for investors in Nigerian companies

    E. Subnational government:

    1. Federal government to cede 5% of VAT revenue to states

    2. Transfer of income from Electronic Money Transfer levy exclusively to states as part of stamp duties

    3. Repeal of the obsolete stamp duties law and re-enactment of a simplified law to enhance the revenue for states

    4. States to be entitled to the tax of Limited Liability Partnerships

    5. Tax exemption for state government bonds to be at par with federal government bonds

    6. More equitable model for VAT attribution and distribution

    7. Integrated tax administration to provide tax intelligence to states, strengthen capacity development and collaboration, and scope of Tax Appeal Tribunal to cover taxpayer disputes on state taxes

    8. Powers for AGF to deduct taxes unremitted by a government or MDA and pay to the beneficiary government

    9. Framework to grant autonomy for states internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism

    10. Legal framework for taxation of lottery and gaming, and introduction of withholding tax for the benefit of states

  • Need for equality, equity and fairness in tax reforms

    Need for equality, equity and fairness in tax reforms

    Sir: The proposed tax reform, involving four tax bills introduced by the federal government has received significant criticism. Notably, it was rejected by the governors’ forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive.

    One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.

    A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.

    Read Also: 18-year-old arrested for stabbing retired permanent secretary to death in Niger

    In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.

    The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.

    The proposed tax reforms by the federal government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.

    •Kenechukwu Aguolu,Kenerek1@gmail.com

  • FG tax reforms will ease burden on hardworking Nigerians – NOA

    FG tax reforms will ease burden on hardworking Nigerians – NOA

    Mr Lanre Issa- Onilu, Director-General (DG), National Orientation Agency ( NOA) says the current tax reforms by the Federal Government  will  ease the burden on hardworking Nigerians.

    He said that it will ensure  that everyone contribute fairly to nation’s development.

    Issa-Onilu  stated this at the beginning of the Sensitisation Campaign on some government programmes on Friday in Minna.

    The programmes are World HIV Day, Security Awareness, Discouraging Get-Rich-Quick Syndrome, World Human Rights Day and the Tax Reform Bills.

    The News Agency of Nigeria ( NAN) reports that the event has its theme : Promoting Awareness, Ethical Values and National Development.

    He was  represented by the Niger  Director of the agency, Mallam Yahaya Gbongbo

    The NOA boss  said that the nationwide sensitisation campaign was on five critical issues central to the nation’s well-being, unity, and development.

    According to him, the Tax reform bills  are designed to ease the burden on hardworking Nigerians while ensuring everyone contributes fairly.

    “By supporting this effort, we can create a tax system that works for all and funds the development projects that will improve our nation,” he said.

    He said that the agency was mobilising Nigerians to unite in addressing issues that affect the development of the country negatively.

    “Today, we are commencing a nationwide mobilisation of Nigerians to unite in our commitment to addressing these pressing issues, and fostering a more informed, secure, and ethical society.

    “The challenges before us require collective action and active participation from all Nigerians,”he said.

    Onilu said that taxation was essential for funding national development.

    “We recognise that it has been a source of concern for many Nigerians due to issues like multiple taxation and its impact on low-income earners.

    Read Also: Why northern Nigeria should not reject tax reforms

    ”To address these challenges, the government is implementing reforms to make the system fairer and less burdensome for citizens,”he said.

    He said that the world HIV/AIDS Day campaign, which compliments the efforts being made by relevant health authorities, coincides with its global celebration.

    “We join the global community within the week across the 36 states, the FCT and the 774 LGAs, in raising awareness.

    “The government has intensified efforts to provide free and accessible HIV testing and counseling services nationwide.”

    “This will ensure antiretroviral treatment is available and accessible to people living with HIV/AIDS among others,”he said.

    He  said that Security remain a top priority of the government, including strengthening security architecture through better equipment, training, and increased funding for security agencies.

    “Government will  also expand policing initiatives to improve collaboration between citizens and law enforcement agencies,”he said.

    On the need to shun the get-rich-quick syndrome, he  said government recognised the erosion of the age long values and economic hardships driving individuals towards unethical practices.

    He said that to  address this, government has implemented youth empowerment programmes such as the National Social Investment Programme (NSIP), and skill acquisition initiatives among others.

    On World Human Rights Day, he said government remained committed to protecting the dignity of every Nigerian.

    “Recent efforts include strengthening legal frameworks to address human rights violations, including gender-based violence and child trafficking,” he said.

    The DG called on Nigerians to continue to support the Federal Government’s policies and programmes to succeed.

    (NAN)

  • Why northern Nigeria should not reject tax reforms

    Why northern Nigeria should not reject tax reforms

    Is Tax Reform against islamic law? Will VAT be charged on muslim inheritance?

    May, I will refer us to the Holy Quran, the Holy Book that guides (with the support of Hadith) our actions as Muslims; Al-Qur’an is the word of Allah SUBHANAHU WA TA’ALA – incontestable, unambiguous, and undeniable. In the Holy Quran, in Surah Al-Anbiya (21:7), Allah SWT Tells Muslims to seek for knowledge and understanding on matters that are beyond their understanding. The Tafsir of Ayat as also elaborated by Hadiths, is very succinct and clear with regard to how Muslims should engage in things that are beyond our understanding or areas of specialization. To that extent, I urge our religious leaders, that when matters that have to do with economics, politics, or indeed areas that require specific specializations, which are beyond their scope or understanding, then they should contemplate and proceed with this Ayat in mind. We have very sound and intelligent Northern Nigerians who can objectively do evaluate to such specialist areas. More than that we should also be able to get multiple opinions on such matters. Indeed, I will also suggest that religious leaders and traditional rulers, should speak last on such matters or midway into the matters, such that they would have gotten full briefing from diverse opinions, which will guide their contemplations as they guide us all. Certainly, the religious leaders and traditional leaders are supposed to be the guides of the conscience of our societies, and they are also the beacons that shine the light to the right pathways we should follow. That is why in my opinion, sometimes rushing to be in the forefront to speak on sensitive matters without adequate research and contemplation, may be counterproductive. Indeed, I totally align with the fact that our Clerics (the Ulamas) need to rise to the occasion, whenever such thorny issues come up, so as to guide people’s thinking and actions to ensure peace, stability and progress.

     That being said, I intend to shed some light on some grey areas in the proposed Tax Bill, in case it will help to give more perspectives that will guide the thoughts and decisions of our Ulamas, traditional rulers and also importantly the entire Muslim Ummah in northern Nigeria. 

     For example, the question about if the bill antithetical to Islamic injunctions? I have come across various write-ups by highly respected intellectuals and academics in northern Nigeria, erroneously referring to a section of the Bill, giving the notion that the bill will charge tax on inheritance, after the reform is done. Those respectable scholars are making specific reference to chapter 2, part 1, section 4, sub-section 3 of the National Tax Bill; titled “Income, profits or gains chargeable to tax”. This section states and I quote; “Income of a family recognized under any law or custom in Nigeria as family income in which several interests of individual members of the family cannot be separately determined”. The section is clearly referenced in error, because the section is not speaking about “inheritance”, but about “income”. In the entire Bill there is no proposal to tamper or deduct tax from inheritance which is forbidden in Islam.

    Read Also: High rate of cervical cancer in Nigeria unacceptable, says Katsina First Lady

     Is Tax Reform anti-north?

    90% of the vulnerable Nigerians, and all low income (minimum wage) earners will be exempted from this Tax in the proposed Bill. So, as a northerner, where about 70% of the about 133 million multidimensionally poor Nigerians are residents and surviving and struggling under the vagaries of socioeconomic headwinds, the reform should be pleasing to us.

     In the case of VAT. I am a strong proponent, allocation by derivation or allocation by consumption. Because that is the sharing formula that will ensure balance and equity and not the current VAT sharing arrangement which favors only Lagos and Rivers States to the disadvantage of the other 34 States and FCT. For instance, for Sokoto where BUA is producing Sokoto Cement, the current policy says because the headquarters of BUA is in Lagos, almost the entire VAT goes to Lagos. The new VAT law proposal is telling us that a chunk of VAT will be paid back to Sokoto State, and not Lagos. Is that anti-north? In my own opinion by simple arithmetic, the people of Sokoto should be happy that now they have an opportunity for them earn significant increase in income.

     The same scenario applies to my state, Kano State. If you look at MTN subscriptions, as an example. According to NBS, for MTN subscribers in the first quarter of last year, 2023;

    Lagos had 26 million subscribers, Ogun State was next with over 13 million, then Kano State with over 12 million, Bayelsa had 1.6million, while Ebonyi State had 1.6million subscribers. What the proposed reform is telling us, is that, MTN will now not pay the chunk of VAT that accrue from all the subscriptions in the entire Country to Lagos. But the in the new arrangement, each State will get the chunk of the VAT that accrued in that state based on the subscriber usage in State, i.e. It means that the VAT paid by those 12 million subscribers will be accounted for and prorated and be sent back to Kano State (which will increase the income). Whereas as it is today, almost all the states in Nigeria lose to Lagos just as an instance. Is that anti-north? The answer is, No.

    Northeast development Commission (NEDC) is the only Development Commission in Nigeria funded with VAT

    Its worthy of note that it is only North East Development Commission (NEDC) is the only Development Commission in Nigeria that is funded with VAT. 3% of the Gross annual VAT collection in the entire Country is deducted (before sharing) is paid directly to NEDC “as first line charge, to accrue to the Commission for a period of 10 years, notwithstanding the provisions of any other law” as one of its source of funding, in line with the provisions of the NEDC Act.

     Interestingly, President Tinubu asked that the provision should not be tampered with, nor should the NEDC act be amended. All the other regional development commissions i.e NDDC, SEDC, and SWDC, and even the NWDC that is undergoing legislation are being funded or to be funded from the “monthly statutory allocations due to member States from the federation Account – his being contribution of the Federal Government”, in line with provisions of the respective Acts of the regional commissions.

     With a Budgetary allocation of about N131bn in 2024 NEDC alone, recognizing the impact of Boko Haram insurgency to the region and the need to revitalize the region with such provision; how could we say that the reform is anti-north. This is so especially when other regions are not protesting this deduction from the VAT as a first line charge. Is this also anti-north? Certainly not!

    Conclusion

    The integrity of the process is a critical success factor. Therefore, the parliamentary process must be proper and it must follow due process. Therefore, the Federal Government should not give the impression that the bill is being forced down the throats of Nigerians. To that extent, I commend President Bola Ahmed Tinubu for directing the Ministry of Justice to engage stakeholders and ensure that all the necessary inputs are made. I advocate that the consultations should on pari passu the legislative process; because time is of essence.

    I strongly advise all well-meaning Nigerians to read the Bill, and not to wait until they are told about the bill by politicians. We need to go through the proposal and where we don’t understand, we should seek understanding from those who may be subject matter experts.

     I am of the view that the Bill is worth a review and evaluation by northern Nigerians. There are areas that we need to look at and address critical issues and negotiate where necessary. However, I believe that allowing politicians to push us to reject the bill will not be in the interest of Muslims, northern Nigerians, and Nigerians in general. We should go through the bill so that we can consult, engage, debate and negotiate (if need be). That is the essence of democracy.

      God Bless the Federal Republic of Nigeria.

  • Tax reforms: Tinubu will always act in interest of Nigerians, says Information Minister

    Tax reforms: Tinubu will always act in interest of Nigerians, says Information Minister

    …as president directs ministry to work with NASS on concerns

    The Presidency has debunked the claims that the proposed tax reforms pushed by President Bola Tinubu’s administration will impoverish some states of the country.

    The Minister of Information and National Orientation, Mohammed Idris said on the contrary, the implementation of the reforms will bring succour to millions of hardworking Nigerians across the country.

    Idris, in a statement he signed and made available to journalists also said the reforms will lead to sustainable growth and development of the 774 Local Governments.

    He assured Nigerians that President Bola Tinubu will always act in the best interest of the Nigerian people.

    The minister also revealed that the President has directed Ministries, Departments and Agencies to work with members of the National Assembly to address concerns raised about the proposed tax reform.

    He said: “The robust nationwide debate on the new tax reform bills currently before the National Assembly is welcomed, and commendable. It is very inspiring to see Nigerians from all walks of life coming out to express their views and opinions on these matters of critical national importance. This is the very essence and meaning of democracy.

    Read Also: Tax reforms: Background, imperatives, highlights and outcomes

    “I call on all commentators and groups to keep up the spirit of informed engagement and to strive to be respectful and understanding at all times despite the diversity of opinions. In the spirit of democratic engagement, there should be no room for name-calling, or the injection of unnecessary ethnic and regional slurs into this important national conversation.

    “Similarly, it is important to be aware that there is a lot of misinformation and fake news circulating around the tax bills and the overall reform agenda of the Tinubu Administration. The fiscal reforms will not impoverish any State or region of the country, nor will they lead to the scrapping or weakening of any federal agencies.

    “Instead, they will bring relief to tens of millions of hardworking Nigerians across the country and empower and position our States and the 774 Local Governments for sustainable growth and development.

    “President Bola Ahmed Tinubu is implementing an ambitious fiscal reform agenda that will devolve more resources to Nigeria’s State and Local Governments, and ultimately to the Nigerian people, in the spirit of harnessing democracy that works for the people.

    “It is pertinent to state that the government has nothing sinister to warrant the suggestion that the process is being rushed. In line with the established legislative procedure, the Federal General 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.

    “We are indeed witnessing, at this moment in the history of Nigeria, the most far-reaching, impactful and beneficial set of fiscal reforms that Nigeria has seen in decades.

    “In addition to the four tax bills being debated and deliberated upon, there is also the 2023 Supreme Court ruling on financial autonomy for local governments, which will significantly empower the tier of government that is closest to the Nigerian people.

    “In all, these reforms will not only facilitate increased revenues (without imposing additional tax burdens on the people), they will also make it possible for citizens to demand and enjoy greater accountability in the management of public resources at all levels of government.

    “President Tinubu and the administration will continue to champion policies that close the loopholes and gaps through which Nigeria’s valuable public resources have been frittered away for decades.

    “On top of this necessary foundation, the resources being conserved and realized from these reforms will be invested in critical infrastructure (healthcare, education, transportation, digital technology, etc) and in social investments that will benefit all Nigerians and ensure that no one is left behind. This is the promise and the reality of the Renewed Hope agenda. “