Reps Pass Controversial Tax Reform Bills For Second Reading

…Tinubu’s Tax Regime Choking, Workers Bearing The Brunt — NLC

ABUJA – The House of Representatives, on Wednesday, approved for second read­ing four tax reform bills presented by President Bola Tinubu to the National Assembly.

The bills, comprising the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill, were passed without opposition from members.

These bills were first introduced on October 8, 2024, but their progression had been delayed due to disagreements among members, particularly concern­ing the content of the Nigeria Tax Ad

 objections from northern leaders and the Nigeria Governors’ Foministration Bill. The bill faced rum, which had previously held up the debate. ­

Before the debate on Wednes­day, Speaker Abbas Tajudeen emphasised the importance of thorough consultations with constituents, urging members to engage with their communi­ties regarding the benefits of the proposed bills.

To streamline the process, the House consolidated the four bills into a single document for the purpose of the debate.

While members raised some concerns over certain sections of three bills that appeared to conflict with provisions of the constitution, as well as a few oth­er clauses, the overall sentiment was one of strong support.

The House unanimously favoured the bills for a second reading.

Minority Leader of the House, Kingsley Chinda, who appeared to speak on behalf of the minori­ty group, expressed support for the overall intention behind the four proposed bills but raised concerns about certain aspects of their provisions.

Chinda acknowledged that the bills aim to reform the na­tion’s tax system to enhance rev­enue generation.

However, he emphasised that while the spirit of the bills is com­mendable, some of the specific provisions need further scrutiny.

“We all agree that the in­tention behind these four bills is positive. However, we have reservations about certain pro­visions. While we oppose some aspects of the bills, we support their underlying goals. We want to reassure Nigerians that we will monitor these provisions closely, and at the appropriate time, we will ensure that any issues with the provisions are addressed in the best interest of the nation,” Chinda stated.

He advocated for a reduction in the Value Added Tax (VAT), emphasising that it is possible to lower taxes while simultaneously addressing conflicts and improv­ing various areas of concern.

During the debate on the bills, House Leader, Prof. Julius Ihon­vbere, praised the president for having the courage to introduce legislation aimed at reforming the nation’s tax laws.

These reforms, he noted, are designed to tackle issues such as multiple taxation, improve reve­nue collection, and diversify the economy.

While acknowledging those who voiced opposition to the bills, the House Leader expressed that these differing views have contributed to strengthening the proposed reforms, which aim to overhaul the country’s tax system, one of the oldest in the world.

Hon. Ihonvbere stated that the proposed tax reform bills aim to empower citizens by supporting small-scale businesses and boost­ing revenue generation. The re­forms are expected to create a more conducive environment for businesses to flourish.

He further explained that the tax bills will simplify the current complex tax system by reducing the number of taxes imposed on companies.

This, he said, will lead to sus­tainable growth. Additionally, the reforms will ease the finan­cial burden on the less privileged by lowering personal income tax and introducing zero taxes on essential sectors such as food, healthcare, and education. The bills also propose zero tax on the minimum wage.

According to Ihonvbere, the number of taxes in the country will decrease from over 60 to just about nine. Disputes arising from tax-related matters will also be resolved within 14 days, ensur­ing greater efficiency in the tax system.

He urged members of the House to actively contribute to shaping history by reforming the tax system, with the goal of fostering revenue growth, boost­ing employment, and improving the lives of ordinary Nigerians.

Minority Whip, Ali Isa (PDP: Gombe), commended the speaker for providing an opportunity for members to thoroughly engage with and consult on the conten­tious aspects of the four tax bills.

He emphasised that through these consultations, Nigerians have been well-informed about the proposed changes.

However, Isa raised concerns about Clause 146 of the Nigerian Tax Bill, which proposes a grad­ual increase in VAT from the cur­rent 7.5% to 10%, and eventually to 15%.

He cautioned that, while the government must explore solu­tions to alleviate the ongoing economic hardship, such a VAT increase would likely exacerbate the challenges faced by the people.

Isa concluded by urging the House to remain vigilant, ensur­ing that the bills reflect the areas where Nigerians most desire im­provements.

Speaking also on the bills, Hon. Bamidele Salam, the rep­resentative for Osun State and Chairman of the House Com­mittee on Public Accounts, em­phasised that while reforms are often challenging and disruptive, they are necessary for a country’s development.

Salam explained that Nige­ria’s tax system is one of the most duplicative in the world, stifling economic growth and discour­aging foreign investment due to its complex and burdensome nature.

He noted that these ineffi­ciencies have created obstacles in the ease of doing business in the country.

He further stressed that any reform initiatives under consid­eration must prioritise the wel­fare of the Nigerian people.

“We must always ask our­selves how these laws will benefit the people,” Salam said, underlin­ing the importance of ensuring that legislative changes serve the public interest.

Stanley Olajide (PDP: Oyo) on his part stressed that on a daily basis, the House of Representa­tives passes bills to establish var­ious institutions.

He emphasised that these newly created institutions will require funding, and that the bills aim to provide the neces­sary financial resources to sup­port them.

Meanwhile, Deputy Chief Whip, Isiaka Ibrahim Ayokunle (APC: Ogun) expressed his sup­port for the proposed tax bills, calling them one of the best de­velopments for the country.

He explained that once enact­ed, the bills will streamline and harmonise all existing tax laws and levies in the nation.

However, he noted that while the proposed law includes penal­ties for those who fail to comply with tax regulations, it should also incorporate penalties for those responsible for the law’s poor implementation.

Hon. Ayokunle emphasised the need for safety nets within the law to protect companies that, although not operating at a loss, may declare losses to avoid paying taxes.

NLC Says Tinubu’s Tax Regime Chok­ing, Workers Bearing The Brunt

Meanwhile, President of the Nigeria Labour Congress (NLC), Comrade Joe Ajaero, has described the taxation policies of the President Bola Tinubu ad­ministration as choking, saying Nigerians, especially the working class are bearing the brunt on dai­ly basis.

According to Ajaero, workers in the country now pay more tax­es than what they receive from the recently increased minimum wage of N70,000.

He also recommended to the International Labour Organisa­tion (ILO) that the implementa­tion of a universal wage system and universal condition of ser­vice for workers would not be out of place.

The NLC accused the Nigeri­an government of disregarding products of collective bargaining agreements, adding that social safety net is almost non existent in the country.

This is as the Director Gener­al of the ILO, Gilbert Houngbo, said that lasting peace will only be possible through social justice.

Speaking at the Tripartite Panel on Global Coalition for So­cial Justice at the UN House in Abuja, on Wednesday, Comrade Ajaero faulted the claims by some of the representatives of the Federal Government that the economic policies have started to show positive signs.

He said: “We are in this hall and somebody is telling us that the economic policies are show­ing positive signs. When this gov­ernment came into power, they removed subsidy on petroleum products, by that, millions of nai­ra was being expected to come in.

“I want to find out the roads they have used that money to build. The tax regime today, some of the civil servants here pay more than the increase in minimum wage. What they were collecting before the minimum wage is higher than what they’re collecting now because of the tax regime.

“Electricity tariff is un­bearable, people are paying for darkness in this country. We are talking about green energy, not a lot has happened in terms of going green, we are still paying more attention to fossil fuel with all the attendant health hazards and environmental pollution in this country.

“Before, the Nigerian gov­ernment promised to get zero emission by 2030, today, after the Dubai whatever, they are talking of 2060 now, which means there is no conscious effort so far to attend this zero emission target.”

Ajaero commended the ILO Director General for coming up with the dialogue on social jus­tice.

He said: “I want to thank you for this attention on social justice, you are talking of. The DG, you have been showing a lot of pas­sion on this, probably because of the background where we come from. We talked about social safe­ty nets.

“I think that’s almost zero in Nigeria. Nigerians generate their power. Nigerians sink borehole for their water. There’s no public transportation in Nigeria that is free for people to go. The hospitals are not there.

“Even the contributory pen­sion policy, some companies have not remitted what they deducted for 60 months. It is hard, for us to talk about social safety nets in a country like this without passion. We have to look at tax justice and even energy justice. We have to put them together in the context of the social justice net so that we will arrive at a particular point, but I think the major problem we have is greed by the capitalist in our society, and that is what is pushing the whole world to war.

“No economy thrives in an era of insecurity and war. If I tell you the demography of insecurity in this country today, you will know why we are having some of the chal­lenges, you will know why we are having problem with productivity.”