Northern lawmakers in Nigeria’s House of Representatives have voiced new concerns over four tax reform bills currently being discussed in the National Assembly.
These lawmakers expressed their reservations during an interactive session organized by the House with the Presidential Committee on Fiscal Policy and Tax Reforms.
The focus of the debate is primarily on a proposed amendment to how Value Added Tax (VAT) revenue is allocated, with the bills sparking extensive discussion.
The bills in question include the Nigeria Tax Bill 2024, intended to establish a comprehensive framework for the nation’s tax system, and the Tax Administration Bill, aimed at creating a clear structure for tax collection and minimizing conflicts.
Other bills are the Nigeria Revenue Service Establishment Bill, which proposes replacing the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service (NRS), and the Joint Revenue Board Establishment Bill, which seeks to establish a tax tribunal and ombudsman.
The National Economic Council and several state governors have advised President Bola Ahmed Tinubu to delay the bills for further consultation.
Northern leaders, including traditional rulers and lawmakers, have also voiced opposition, arguing that the proposed reforms disproportionately disadvantage the northern region.
Despite these concerns, President Tinubu has advocated for continued legislative review, emphasizing that input and revisions can still be made without withdrawing the bills.
During the session, representatives including Yusuf Adamu Gagdi (APC, Plateau), Ahmed Jaha Babawo (APC, Borno), Zainab Gimba (APC, Borno), and Zakariah Dauda Nyampah (PDP, Adamawa) raised objections to the bills, citing potential negative economic impacts on the North.
They argued that the region, already weakened by insecurity and low productivity, could suffer under the proposed changes.
The Presidential Committee on Tax Reforms, however, assured the lawmakers that the current VAT distribution is skewed in favor of a few states and does not equitably serve the entire country.
Northern lawmakers highlighted the socio-economic challenges and security issues impacting states in the region, suggesting that these vulnerabilities have not been fully considered in the proposed bills.
They called for a tax reform approach that reflects the North’s unique challenges, particularly around security concerns.
Rep. Gagdi pointed out that insecurity has significantly weakened northern economies, questioning how displaced communities could benefit from a VAT model based on consumption and imports.
He noted that industries and productivity in these areas have been deeply affected by issues such as the Boko Haram insurgency and widespread banditry.
Rep. Jaha expressed concerns about the timing of the reforms, noting that the North’s economic stability is already compromised due to security threats.
He argued that the proposed revenue-sharing formula would unfairly penalize states with fragile economies.
Similarly, Rep. Gimba highlighted the economic obstacles faced by states like Borno, which are heavily affected by insurgency, calling for a more balanced VAT allocation formula that accounts for these challenges.
Rep. Nyampah urged careful review of any reform provisions that could disproportionately impact northern states.
Meanwhile, Senator Abdurahman Kawu Sumaila of Kano South assured constituents that northern legislators would consider their views when deciding on the bills.