Tax Reform Brouhaha

Let us go straight to the point. The Tax Reform Bills sent to the National Assembly by President Bola Tinubu is not exactly a policy document. There is more to it than meets the eyes. The truth and facts about the bills will hardly be known until they reach implementation stage. What we are seeing now are mere preambles. As a matter of fact, the bills represent the next stage of the Tinubu surprise packages. Like other unexpected agenda that the President had earlier rolled out, the tax bills have come with their own controversy. The North was quick to smell a rat. It said the bills will not serve the best interest of the region. The originators of the bills, led by Taiwo Oyedele, chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, have tried to allay the region’s fears. But that is not working. What appears to be uppermost in the minds of many is Tinubu’s penchant for sectionalism. He is running the most nepotistic regime in the history of Nigeria. Many interpreters of the bills see the document as intended to advance the economic fortunes of the President and his cronies. They believe that many of those supporting the bills are doing so blindly. They hardly know, let alone understand, what the President and his inner cabinet are scheming to achieve with the bills, if they become law.

Akpabio

As we earlier noted, the tax bills, if they become law, will be the next phase of the disruption that the Tinubu administration has come to be. Before it, we had the unspeakable disruption that was the removal of subsidy on petroleum products. The country is still squirming from that poorly-digested, ill-thought-out policy that saw the country’s economy tailspin into chaos. Hardship has taken over the landscape so much so that Nigerians are still wondering how they got to this messy curve.

Now the tax reform agenda is on. The Tinubu administration is pushing the bills with frenzy. The discerning among the people are not taken in by the promise of reforms. What manner of reforms? Whose interest will be served by them? These are some of the issues in contention. The difference between the current brouhaha and others before it is that while the President’s haphazard economic policies are stifling Nigerians of all shades and strata, the tax bills are being suspected by the North of having sectional undertones. Northern leaders and stakeholders are suspicious of its intent and content. This suspicion is already breeding bad blood and distrust among the top players in the Tinubu administration.

The Vice President, Kassim Shettima, was the first to tear presidential cohesion apart in this matter. Following the unease that pervades the North over the proposed tax reforms, Shettima got the National Econimic Council (NEC), which he chairs, to resolve that the President should withdraw the bills from the National Assembly for wider consultations. But the President has since shunned the resolution of NEC and asked the National Assembly, instead, to ensure that the bills pass through the required legislative processes.

But the road has been bumpy for the bills. Its ride to the floor of both chambers of the National Assembly has been tumultuous. It is causing cracks in the system. The harmony that used to exist in the leadership of the Senate suffered a setback last week following the conflicting decisions that were taken at the plenaries. A plenary presided over by Deputy President of the Senate, Jibrin Barau, had resolved that further legislative action should be suspended on the tax bills until the contentious issues around them are resolved. Strangely, however, Barau was overruled the next day by the President of the Senate, Godswill Akpabio, who maintained that the Senate neither suspended nor withdrew the bills. Legislative actions on the bills are, therefore, to go on.

From the foregoing, it can be deduced that all is not well with the Tinubu administration. There are divisions and dissents within. But Tinubu will not lose sleep over the internal wrangling because he was forward-looking in putting together his administration. Shettima, as Vice President, will not be a threat to Tinubu. He is easily dispensable. Tinubu and the hawks around him have, even before now, clipped the wings of the Vice President.

Perhaps Tinubu would have had something to worry about if he were working with an independent-minded leader of the National Assembly. Akpabio, Tinubu’s hand-picked Senate president, is a factotum. He will do whatever the President says. That is what qualified him for the job. He was programmed by Tinubu to become the President of the Senate, if Tinubu won the presidency. The understanding was reached even before the primary elections that produced Tinubu as the presidential candidate of the All Progressives Congress. All the role that Akpabio played on the day of the primary was based on that. So far, Akpabio is keeping his own side of the bargain. The Senate under his leadership must do the President’s bidding. That is why the 10th Senate has remained no more than a rubber stamp.

But beyond the politics that surrounds the tax bills, the practical impact of what is already being done around taxes and taxation in Nigeria is adding to the woes of the ordinary Nigerian. The Federal Inland Revenue Service, which one of the tax reform bills seeks to replace with Nigeria Revenue Service, is already taking it out on Nigerians. It has instructed all banks to charge stamp duty of N50 on inflows of N10,000 and above and remit same to it. This tax regime has since begun. The revenue service has not explained to Nigerians why they should bear this extra burden in a depressed economy. The people should know who benefits from this tax. How will the proceeds be deployed? So far, transparency is lacking in all this. This partly explains the suspicion surrounding the Tax Reform Bills.

Even though the North has pointed to specific areas of concern around the bills such as the derivative clause and Value Added Tax sharing formula, there is still more to the bills than the ordinary eyes can see. The bad situation is not helped by the fact that partisan and regional considerations have been introduced into the matter. While northern leaders and groups are expressing fears and suspicions over the tax bills, Akpabio, a South-southerner, has galvanized senators from his zone to express support for the bills and solidarity with the President for introducing them. The regional and partisan slant that has been injected into the matter may ultimately become its Achilles heel. A well-reasoned, properly articulated tax policy that is well explained and understood by the taxpayer is what will serve everyone’s purpose. Sectionalism can only drive a further wedge into an already burdensome tax regime.

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