Former Minister of Communications and Digital Economy, Prof. Isa Ali Pantami, has called on the National Assembly to suspend the tax reform bills currently under consideration to allow for broader consultations.
He stated, “I have been engaged for the past week, having attended the World Halal Summit 2024 as a speaker, following an invitation from the Presidency of the Republic of Turkiye. As a result, I haven’t had the opportunity to thoroughly read and review all four bills, including the Nigeria Tax Administration Bill, 2024. However, in the past 40 hours, I have focused on reviewing them, particularly the Nigeria Tax Administration Bill.
“The bill has the potential to transform tax collection and administration if it is improved and implemented in the national interest. However, there are critical observations that must be addressed, including potential conflicts with the Constitution of the Federal Republic of Nigeria.
“Several sections of the bill raise concerns for me, primarily due to their lack of clear definitions, which could lead to significant challenges during implementation. Additionally, regulatory bodies may exploit these ambiguities when formulating their regulatory instruments.
“In light of these points, I advise the National Assembly (NASS) to consider the following:
1. Suspend Legislative Action Temporarily: Some challenges cannot be addressed solely by the chambers. In leadership, the willingness to change one’s mind is a sign of intelligence and empathy, not weakness.
2. Facilitate Wider Consultations on the Bills: It is essential to ensure that all relevant stakeholders are engaged and that any ambiguities in the bills are thoroughly reviewed and addressed.
“I specifically recommend reviewing the following sections:
1) Section 3(3)
2) Section 7(6)
3) Section 8(2)
4) Section 23
5) Section 28
6) Sections 95, 96, 97, and 118
7) Section 141 (supremacy clause)
“I believe that tax, constitutional, and business lawyers, among others, have a vital role to play in enhancing these bills. As a policy researcher, I may also provide feedback on the remaining three bills at a later time.
“Finally, it is crucial for the government to address the increasing mistrust between itself and its citizens, as the situation in our nation continues to deteriorate due to this disconnect. Citizens are largely suspicious, and building trust is paramount at this moment for all branches and tiers of government. We must prioritize national interests above individual interests, and discussions surrounding these issues must be conducted objectively and critically.
“May we continue to serve our country diligently and honestly, praying for Allah’s blessings upon the Federal Republic of Nigeria.”
Aminu Tambuwal, the former Governor of Sokoto State and a Nigerian Senator also believes that now is not the appropriate time for any tax increases, especially considering the economic hardships that Nigerians are currently experiencing.
“I believe this is the wrong time for any upward adjustment of either VAT or any form of tax,” he stated. “The timing is inauspicious and very inappropriate. We are already facing significant difficulties due to the devaluation of the naira and the removal of fuel subsidies enacted by this administration. We should focus on managing these hardships and finding ways to alleviate the challenges faced by our people.”
Tambuwal’s comments echo the concerns of many northern leaders who worry that the new value-added tax (VAT) distribution will disproportionately benefit wealthier southern states, further widening the economic gap between the regions.
In response to the argument, the Presidency, through Bayo Onanuga, the Special Adviser to the President on Information and Strategy, stated on Monday regarding the potential negative impact of the tax reform on northern states. He insisted that the proposed tax reform would not unfairly favour states like Lagos and Rivers at the expense of northern regions.
Onanuga also clarified that the proposed changes in funding for agencies such as the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Technology Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA) should not be interpreted as an attempt to eliminate these agencies. Instead, the reform aims to streamline funding mechanisms to ensure that these institutions continue to operate without jeopardizing the economic stability of any region.
“No part of the tax reform bills recommends the scrapping of TETFUND, NASENI, or NITDA. No provision will impoverish the North,” Onanuga stated. “The reform seeks to ensure a more equitable distribution of tax revenue across all states, considering the varying economic capacities of different regions.”
