Thursday, November 28, 2024

Tax Reform Bills Sent to the Senate for Second Reading by the Presidency

On Thursday, the Senate approved four tax bills for a second reading via voice votes. The bills that advanced to the second reading include a proposal to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombud, all part of President Tinubu’s extensive tax reform initiative. This legislation aims to harmonize, coordinate, and address disputes related to revenue administration in Nigeria. It is important to note that President Tinubu submitted these four tax reform bills to the National Assembly for review on October 3. This initiative has sparked controversy, particularly among Northern governors and other stakeholders who have expressed opposition to the tax reforms. In response to these concerns, the Presidency clarified that the bills are not aimed at any specific region but are intended to foster national development. During the session, lawmakers engaged in discussions regarding the fundamental principles of the tax reform bills. Previously, the Senate had convened in a closed-door meeting to review the four bills submitted by President Tinubu on September 3, 2024, following the recommendations of the Tax Reforms Committee led by Taiwo Oyedele. While the reforms have been widely recognized as essential for revamping Nigeria’s tax system and alleviating the tax burden on citizens, Senator Ali Ndume raised concerns about the timing and certain aspects of the legislation. He proposed that, with appropriate amendments, the reforms could be passed “in less than 24 hours” if they were withdrawn and reintroduced. Conversely, the Chief Whip firmly disagreed with this perspective, underscoring the necessity of progressing the bill to the public hearing phase. “The bill should successfully complete the second reading and undergo a comprehensive review during the public hearing. Subsequently, it can be examined clause by clause,” he stated. Senator Ali Ndume, the sole dissenting voice, remarked, “Reforms are essential; I do not oppose any reforms. My concern lies with the timing, particularly in the current context of Nigeria, as I wish to echo what Senator Seraike has articulated.” One will attend the public hearing regarding the issue of derivation, as it is necessary to amend the Constitution before certain proposals within the Bill can be implemented. "This Bill ought to be retracted; we should refine it and present it after securing the support of the Governors, Traditional Rulers, and the NEC. "Upon reviewing the Bill, I noted that it encompasses numerous aspects, particularly concerning VAT and Derivation. It is essential to engage in negotiations prior to establishing a definitive stance. "While it may appear appealing, it might not be as beneficial as it seems. If the tax burden is shifted to the manufacturer, they will inevitably pass it on to the consumer. "The Bill proposes a reduction from 30% to 25%, which implies that an individual in Nnewi, who is no longer generating substantial revenue, is being taxed at the same rate as someone who is not actively engaged in any productive activity."

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