The Senior Special Assistant to the President on Media and Publicity, Temitope Ajayi, clarified issues surrounding the controversial Tax Reform Bills on Wednesday, following the uproar triggered by President Bola Tinubu’s submission of the bills to the National Assembly.
In response to the criticisms, President Tinubu directed the Ministry of Justice and the National Assembly to address the concerns raised by stakeholders, particularly from northern Nigeria. Critics have argued that the bills could further impoverish citizens and disproportionately impact the region.
The Minister of Information and National Orientation, Mohammed Idris, reassured Nigerians that the bills are undergoing due legislative process and invited meaningful inputs to improve the proposals.
“It is pertinent to state that the government has nothing sinister to warrant the suggestion that the process is being rushed,” Idris stated on Tuesday. “In this vein, President Tinubu has already directed the Federal Ministry of Justice and relevant officials to work closely with the National Assembly to ensure that all genuine concerns are addressed before the bills are passed.”
Ajayi expanded on these reassurances, emphasizing the benefits of the reforms. “Human beings naturally resist change,” he remarked. “Since the public debate around the Tax Reform Bills started, the strongest pushback has come largely from the north. If Governor Zulum and other voices of resistance had taken time to examine the bills, they would see how progressive and transformative the provisions are.”
Ajayi noted that the reforms aim to strengthen the fiscal capacity of both federal and state governments, enhancing their ability to generate revenue and support development.
Ten Ways the Tax Bills Benefit States
Ajayi outlined the following benefits of the Tax Reform Bills for state governments:
- Increased VAT Revenue for States: The federal government will cede 5% of its current 15% VAT share to states.
- Transfer of Electronic Money Transfer Levy: States will gain exclusive access to revenue from this levy as part of stamp duties.
- Repeal of Obsolete Stamp Duty Laws: Simplified laws will improve states’ revenue generation.
- Taxation of Limited Liability Partnerships: States will now collect taxes from these entities.
- Tax Exemptions on State Bonds: States will enjoy exemptions, aligning their bonds with federal government bonds.
- Equitable VAT Distribution: A new model will boost states’ VAT income.
- Integrated Tax Administration: Improved tax intelligence, capacity development, and collaboration with the Tax Appeal Tribunal.
- Unremitted Taxes Deduction Framework: The Accountant General can deduct unremitted taxes by MDAs for the benefit of states.
- Autonomy for State Revenue Services: Enhanced Joint Revenue Boards will strengthen fiscal federalism.
- Taxation of Lottery and Gaming: States will gain revenue through a withholding tax framework.
Ajayi concluded by urging state governments to take advantage of the proposed reforms. “The Tax Bills are not injurious to the states. They streamline the tax system, catalyze economic output, and incentivize states to become economic powerhouses. Governors must invest in manpower and critical infrastructure to support businesses and socio-economic activities.”
The bills, once passed, promise a transformative approach to fiscal federalism in Nigeria, balancing the needs of both federal and state governments.
