The House of Representatives on Wednesday passed the controversial tax reform bills submitted by President Bola Tinubu for second reading.
The bills are: the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill.
The executive bills submitted to the National Assembly were read for the first time on the 8th of October, 2024.
However, the debates on the proposed legislations were put on hold due to the controversy it generated with some northern lawmakers vehemently kicking against some aspects, especially as it regards the sharing formula of Value Added Tax (VAT).
The National Economic Council (NEC), a body that comprises governors and chaired by Vice President Kashim Shettima, had urged the president to withdraw the bills for further consultations. However, the defiant Tinubu refused, saying that all concerns should be addressed in the National Assembly.
Leading the debate on the general principles of the bills at the plenary yesterday, House Leader, Prof. Julius Ihonvbere commended the President for having the courage to institute the bills.
He expressed optimism that bills would address and reform the nation’s tax laws with a view to among others address issues of multiple tax, multiply revenue collection, and diversify the economy.
Ihonvbere was of the opinion that the opposing views helped strengthen the bills which aim to overhaul the tax system in the country as the oldest tax system in the world.
In his intervention, the Minority Leader of the House, Hon. Kingsley Chinda, said while he supported the spirit behind the four bills, he has issues with some of the letters of the proposed laws.
He stated: “We have all agreed that the spirit behind the four bills is good. But we have issues with some of the letters of the bills.
“Why we oppose some letters of the bills, we support the spirit and want to assure Nigerians that we will watch those letters and at the appropriate time, we will ensure that the letters are corrected in the interest of Nigerians.”
Chinda, however, called for the reduction in the VAT, saying it was possible to reduce tax, while efforts should be made to tidy up all areas of conflict.
On her part, Hon. Miriam Onuoha said she was in support of the bills because they seek to balance income, adding that the essence of taxation was to make it in a manner that is progressive, where the poor get better benefits, and take more from the rich.
She cited Section 164(4a&b) which provides exemptions and reliefs for additional employment for companies that have taken new employees on a salary of N100,000or less, adding that the bills propose a 50 percent discount or rebate for them.
Onuoha said the sunset clause for Tetfund should be expunged, adding that the agency has proved to be an interventionist by reducing infrastructure gap in the country’s tertiary institutions.
She also called for digitisation of audited accounts in the new bills, saying it would stop the rampant or incessant frivolous issue, issuance of audited accounts by companies.
He argued that a bill without an interpretation clause was a blind bill and could be subject to abuse by whoever was going to interpret it, saying the House must ensure that there was an interpretation clause on the other three bills.
Tax Reform Bill: Why I raised Concern Over Some Issues-Rep. Jaha
Meanwhile, the member representing Chibok, Damboa and Gwoza Federal Constituency of Borno State, Hon. Ahmed Jaha stated that he raised concern over some provisions of the Tax Reform Bill because they are areas that need to be addressed.
“First of all, the bill was transmitted despite rejection by the members of the National Economic Council, despite rejection by the elders across the country, despite rejection by the Governors’ Forum, particularly the Northern Governors’ Forum across the country.”
He added: “That was the reason why it generated a lot of controversies at the very beginning when the bill was presented. In other words, members of the parliament, particularly in the House of Representatives, were not on the same page as usual.”
The lawmaker however added that, while he disagreed with some of the provisions, there are areas that he has endorsed.
He said, “My position as a person is to maintain the status quo. The highest I can concede as far as my opinion and the opinion of my constituents is to cede 20 percent based on derivation or based on generation derivation.
“In other words, wherever these companies have their headquarters, 20 percent can be given to them.
“That’s what we have currently in Section 40 of the current Act that is governing the VAT distribution. But if it’s based on consumption derivation and there is enough and adequate technology and infrastructure to track consumption, analyseconsumption and distribute or share them accordingly, then to me it’s a very good deal because there is fairness.
“Instead of you remitting 30 percent or 20 percent simply because these companies that generated this money or VAT have been headquartered in certain locations, we give them that money for you to be fair to Nigerians, it’s for you to pay this 30 percent to where actually the consumption took place.
“So this is where I’m satisfied. And the second area where I am actually satisfied is there is a consensus among all honourable members that NITDA is not going to be terminated, NASENI is not going to be terminated and TETFUND is not going to be terminated, bearing in mind their importance to the national development.”
He also objected to the proposed inheritance tax which he said was against the provisions of Islam, Christianity, and other religions.
According to him, Islam was explicit and does not allow tampering with a deceased estate.
