The lingering news on the tax reform bill made months ago by the presidency after the national unrest is somehow reshaping into what looks more like a controversial statement.
A recall to the 3rd of September, 2024 recorded that President Bola Ahmed Tinubu sent 4 bills to the Senate House, and since then, acting on them has been slow. It was this slow pace that triggered a decision made after the one-hundred-and-forty-fourth meeting of the National Economic Council ( NEC).
The NEC meeting was presided over by the vice president of Nigeria Kashim Shettima on the 31st of October, 2024. He (Kashim Shettima) recommended that the Tax Reform Bills be withdrawn following the aftermath deliberations made by governors of the 19 northern states, and numerous highly esteemed and respected traditional heads of the northern region of Nigeria that was carried out early in the week.
The core reason for the influence of the recommendation to cancel announced by Shettima was the explanation coming from the Northern governors and of course the traditional rulers.
Chairman of the Nigerian Northern Governor’s Forum Gov. Inuwa Yahaya of Gombe State, and Gov. Abdullahi Sule of Nasarawa State cleared the air after the forum’s deliberation in the meeting.
These were their message:
“This is because companies remit Value Added Tax (VAT) using the location of their headquarters and tax offices where the goods and services are consumed. In view of the foregoing, the forum unanimously rejects the proposed tax amendments and calls on members of the National Assembly to oppose any bill that can jeopardize the well-being of our people.”
As the issue presses on the governors also made it clear that the northern forum is in no way against any policy that will shoot up the growth of the country.
The four bills passed were the Nigerian Revenue Service, the Joint Revenue Board Establishment, the Tax Administration Bill, and the Nigerian Tax Bill.
The core purpose of proposing the passing of the four bills agitated by President Bola Ahmed Tinubu is to support and strengthen the spelled-out objectives of his present administration, establishing legal frameworks governing taxation incomes, transactions, and instruments. In a nutshell, it will be centered on a 5% telecoms tax, a 5% Excise Tax on Lottery and gaming income, a 4% development levy on companies, 27.5% company tax, VAT Exemptions, and an increment in VAT.
The increment in VAT proposes to raise VAT from 7.5% to 10% by 2025, the VAT exemption seeks to have certain exempt including crude oil export, and purchased goods, the 27.5% Company Tax will handle imposing 27.5% tax rate on the total profit of every company in Nigeria, the 4% Dev Levy will fund the Nigerian Education Loan Funds (NELFund), the 5% excise tax will extract revenues from Lottery and Betting agencies, while the last 5% telecom tax will have the Nigerian Communication Commission police telecommunication companies and ensure they pay the proposed tax.
As much controversies surround passing the Bills on Taxation, the Northern Governors, together with its traditional rulers are sounding loud that this proposal will be very unfair to the North and this had pushed the motion as the Oyo State governor Seyi Makinde and other governors from different parts of the country also recommended that there be a withdrawal of the bill so that stakeholders be carried along.