The Presidency’s Senior Special Assistant on Media and Publicity, Temitope Ajayi, provided additional clarification on the contentious tax reform bills on Wednesday.
This follows President Bola Tinubu’s directive on Tuesday for the National Assembly and the Ministry of Justice to collaborate in addressing the public’s concerns about the proposed legislation.
The bills have sparked criticism, particularly from northern governors, with many alleging that the reforms disproportionately target the region. Others argue the measures could exacerbate economic hardship for Nigerians.
In response, President Tinubu tasked the Ministry of Justice with reviewing the concerns and working closely with the National Assembly to refine the bills.
Minister of Information and National Orientation, Mohammed Idris, emphasized on Tuesday that the government is open to constructive feedback and that the legislative process would follow established protocols.
Idris stated, “The government has no hidden agenda and welcomes meaningful input to address any ambiguities.
“The President has already instructed relevant ministries and officials to collaborate with the National Assembly to resolve genuine concerns before the bills are enacted.”
Ajayi, in her remarks on Wednesday, elaborated on the benefits of the reforms for state governments.
She noted that resistance to change is natural, as people often prefer familiar situations over uncertain but potentially rewarding opportunities.
Ajayi urged critics to set aside fears of the unknown and focus on the bills’ potential to foster progress.
She acknowledged that opposition to the bills has been strongest in the north, with Borno State Governor Babagana Zulum leading the charge.
However, she argued that some of the criticisms were based on misunderstandings of the bills’ content and intent.
Ajayi stressed that the reforms aim to strengthen both federal and state governments financially, promoting fiscal stability and growth.
During a recent town hall on Channels TV, Taiwo Oyedele, Chairman of the Presidential Committee on Tax and Fiscal Policy Reforms, alongside other panelists, presented detailed arguments supporting the passage of the bills.
Ajayi highlighted these discussions as evidence of the reforms’ potential to transform Nigeria’s fiscal landscape.
Ajayi listed the 10 ways the Tax Bills will serve the states better and enhance their capacity to earn more revenue as follows:
- The federal government will cede 5% out of its current 15% share of VAT revenue to states.
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The Bills will transfer income from the Electronic Money Transfer levy exclusively to states as part of stamp duties.
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The Bills seek to repeal obsolete stamp duty laws and re-enactment of a simplified law to enhance the revenue for states.
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Under the new dispensation, the Tax Bills will usher in, and states will be entitled to the tax of Limited Liability Partnerships.
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When passed by the National Assembly, the Tax Bills will enable the state government to enjoy tax exemption on their bonds to be at par with federal government bonds.
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Under the proposed tax reform, states will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income.
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Integrated tax administration will provide tax intelligence to states, strengthen capacity development and collaboration, and scope of Tax Appeal Tribunal to cover taxpayer disputes on state taxes.
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The proposed tax laws grant powers for the Accountant General of the Federation to deduct taxes unremitted by a government or MDA and pay to the beneficiary sub-national government on personal income tax of workers of federal institutions in states.
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Framework to grant autonomy for states internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism.
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Legal framework for taxation of lottery and gaming and introduction of withholding tax for the benefit of states.
The statement added, “From the aforementioned, it is clear that the Tax Bills are not in any way injurious to the states.
“Apart from streamlining the tax system in Nigeria and catalysing economic output, the tax and fiscal policy reforms provide incentives for states to become economic powerhouses.
“The challenge for governors will be to put on their thinking cap by investing in manpower and critical social and physical infrastructure in their states that will support businesses and socio-economic activities to flourish.”
