The Arewa Consultative Forum (ACF), a Northern Nigerian socio-political group, said it has reviewed President Bola Tinubu’s Tax Reform Bills and submitted its recommendations to the National Assembly.
This was contained in a statement signed by the group’s national publicity secretary, Tukur Muhammad-Baba, a professor of sociology.
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Last year, President Tinubu transmitted four tax reform bills to the National Assembly. They are the Joint Revenue Board of Nigeria (Establishment) Bill 2024, the Nigeria Revenue Service (Establishment) Bill 2024, the Nigeria Tax Administration Bill 2024, and the Nigeria Tax Bill 2024.
The Presidential Committee on Tax Reforms and Fiscal Policy drafted them to overhaul Nigeria’s tax laws.
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However, the Northern elites, including state governors, described the bills as “anti-North,” stoking stiff debates and controversies, especially regarding the Value Added Tax (VAT) sharing formula.
The National Economic Council (NEC), a body composed of governors and chaired by Vice President Kashim Shettima, urged President Tinubu to withdraw the bills for further consultations.
However, the president refused, stating that all concerns should be addressed in the National Assembly.
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Governor Babagana Zulum of Borno State even claimed that the reform would only benefit Lagos State – the president’s home state.
Even though the diplomacy of the Speaker of the House of Representatives, Abbas Tajudeen, helped to douse the tension the proposals had earlier created among lawmakers, the North-South divide persisted when the lawmakers gathered for a second reading of the bills.
The ACF’s recommendations
In their statement, the ACF said it has submitted its report containing a comprehensive set of observations and recommendations to the National Assembly.
“The ACF’s submission was the outcome of a special purpose Committee of experts set up by its Board of Trustees which studied the bills for appropriate recommendations,” it stated, adding that copies of the report have been distributed to the Forum of Northern State Governors, traditional rulers, northern interest groups and relevant government agencies and other stakeholders including the press.
The group said the bills have implications for all sections of the country and not just the North.
The group’s report highlighted seven key recommendations focusing on VAT, the Tertiary Education Trust Fund (TETFUND) and the National Information Technology Development Agency (NITDA), among other components of the proposed bills.
The ACF recommended that the current 7.5 per cent rate of VAT be retained “in line with the reality of current economic challenges facing citizens and businesses.”
This, the group said will improve the efficiency of VAT collection and revenue collection “through the formalisation of the informal sectors and the use of digital technologies, as well the vigorous expansion of Nigeria’s tax base through encouraging private sector investments.”
In addition to this, the ACF said VAT on agricultural equipment should be expunged. It added that words like “supply and supplies” in Chapter 6 (VAT), Part 1, Sections 143, 144, 145 and 147 of the Tax Administration Bill should be changed to “consumption or consumptions”.
“Also, the term ‘derivation’ needs to be clearly and unambiguously defined and its distribution should be based on consensus reached through consultation with states and local governments as well as the advice of the Revenue Mobilisation and Fiscal Commission (RMFC),” it added.
Secondly, the group recommended that all small towns and major cities should have their streets named and houses numbered to make taxpayers easily traceable.
In its third recommendation, the group said the “annual upper limits must be set to tax exemptions and waivers.”
“Drastically reduce the powers attributed to the Chief Executive Officer and Chairman of the Board of Directors/Governance of the Joint Revenue Board as the proposed provisions amount to attributing and concentrating almost absolute powers of supervision and accountability to a single person,” it said in its fourth recommendation.
In addition to its fourth recommendation, the group advised that six executive directors reflecting federal character must replace the proposed eight Coordinating Directors. “The executive directors must be nominated by the President and confirmed by Senate,” it said.
“Retention of TETFUND and NITD through re-couching Section 69 of the proposed Nigeria Tax Bill as Development Levy to be shared to TETFUND, NITDA, NASENI and the Education Loan Fund,” the fifth recommendation read.
Also, the group recommended that the word “ecclesiastical” be replaced with “religious” throughout the bills. “And Section 4(3) of the Tax Bill should be expunged and the matter left to the jurisdiction of Sharia and customary laws,” it said.
Lastly, the group recommended that the bills must allow for records of accounts and preparation of tax returns in local languages, and not just in English.
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The group, however, encouraged other concerned groups and stakeholders to review the tax bills and “make submissions to the relevant National Assembly (Senate and House of Representatives) Committees undertaking public hearings on the proposed tax bills.”
Every interest group is encouraged to take the public hearings seriously enough to contribute to the emergence of robust laws that will stand the test of time and in the national interest, it stated.
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