After months of uncertainty, the House of Representatives yesterday debated the four tax bills transmitted to the National Assembly for consideration and passage by President Bola Tinubu.
The bills scaled second reading after the lawmakers reached a consensus on the contentious Value Added Tax provisions during plenary, reports The PUNCH.
In 2024, President Bola Tinubu transmitted four tax bills to the National Assembly for consideration and passage, following the recommendations of the Presidential Taskforce on Fiscal Policy and Tax Reforms headed by Taiwo Oyedele.
The proposed bills are the Nigeria Tax Bill 2024; the Nigeria Tax Administration Bill; the Nigeria Revenue Service (Establishment) Bill; and the Joint Revenue Board (Establishment) Bill.
However, the bills sparked strong emotions across the country with northern leaders opposed to its passage, citing the Value Added Tax provisions.
The Reps consequently suspended debate on the bills with many lawmakers demanding its withdrawal but the President resisted pressure to retract the bills.
In January 2025, the President finally had his way following a meeting between the Nigeria Governors Forum and the Oyedele-led committee.
At the meeting, the 36 governors proposed that the VAT revenue should be shared 50 per cent based on equality, 30 per cent on derivation and 20 per cent based on population to guarantee a fair distribution of resources.
During yesterday’s plenary presided over by the Speaker, Tajudeen Abbas, the lawmakers took turns to make their contributions on the four bills, after which they were passed for second reading and also consolidated into one on the advice of the Speaker.
Leading the debate on the general principles of the bill, House Leader, Prof Julius Ihonvbere, commended Tinubu and Abbas for granting lawmakers enough time to consult widely with their constituents.
The development, he said, made it possible for the Green Chamber to finally agree to look at the provisions of the reform initiatives in the interest of the nation.
He said, “I commend those who expressed their reservations on the bills. To be fair, we need a total overhaul of our tax administration system to drive the nation’s economic transformation, a transformation that will not only translate into results but which will also improve the life of every person.”
He lamented that Nigerians, despite the harsh economic conditions, pay multiple taxes to about 15 agencies, adding that when passed into law, the reforms will guarantee a uniform tax administration system for the good of all.
Urging his colleagues to support the proposed legislation, the Edo lawmaker noted that the President Tinubu-led government is committed to revamping micro businesses in Nigeria, hence, the provision in the bill for tax exemption for small businesses with little profit margin.
“Small businesses are the focus of this administration. It supports small businesses to expand the economy. This means that we are connecting more taxes and growing businesses. We also have a lot of incentives for small businesses. We have increased the tax exemption threshold for small businesses,” he added.
In his contribution, the member representing Ede North/Ede South/Ejigbo/Egbedore Federal Constituency, Bamidele Salam, described reforms as catalysts needed for the economic development of any nation.
He said, “Reforms are often very difficult but they are always very essential as nations need to realise that they must hurry up along the journey to development. Whatever system, policy, law or regulation that we are bringing on board, the first consideration must be the welfare of the majority of the Nigerian people, those who can hardly afford to have three square meals.
“Those who cannot afford good education and good health care system, and so when we look at any piece of legislation being proposed by the executive, especially as minorities, we ask ourselves: How does this law make life easier for the common man? How does it make it easier for the people of Nigeria to have a better life?’’
He commended the president and the governors, noting that states with a 10 per cent share of the VAT now have more money to fund critical infrastructural projects in their domains.
“We are going to require a lot of funds to grow our economy, particularly in the area of artificial intelligence,” he said, urging his colleagues to support the bill to go for a public hearing.
On his part, the newly appointed Deputy Whip of the House, Ibrahim Isiaka, said, “To many Nigerians, one of the best things to happen to us since we’ve been growing this economy is the harmonisation of taxes in this country.
“Even, contractors applying for contracts now know that when they bid, a certain percentage they are going to pay goes to the government. They are also aware of the taxes they will pay to manage the contract.’’
He called on the House to enshrine in the bill punishment for tax evaders.
“Inasmuch as we have penalties for tax evaders, I want us to equally enshrine in this bill the infractions or consequences that will be applied to tax evaders. The governments will equally bear the same consequences in return,” he added.
However, expressing his reservation about the tax administration bill, the lawmaker representing Jibia/Kaita Federal Constituency, Katsina State, Sada Soli, pointed out that it contained what he called “several inconsistencies.”
According to him, “Some of these challenges raise constitutional and jurisdictional concerns, particularly in Section 141, which deals with the supremacy clause. This contradicts some of the positions of the Constitution of the Federal Republic of Nigeria. Then, there is the issue of overlap in the existing laws, particularly the Personal Income Tax Act, Company Income Tax Act and the FIRS Tax Act.
“There is some existing conflict that this bill may cause, which I believe the committee will look at. However also, there is the issue of fairness practicability and reasonability. How reasonable would this law be because law must be reasonable and fair because it is going to govern human beings?”
Soli further argued that tax collection may face similar challenges of logistic hitches in the deployment of technology.
“There may be some level of exclusion where technology cannot reach. This is a concern that should be looked at by this Assembly. There are administrative and operational issues. This bill is ambiguous because of the absence of an interpretation clause.
“The interpretation clause is not robust and did not address the issue of derivation. What is a derivation in this Act? What does it mean? It needs to be defined so that it will be interpreted correctly and applied,” he further said.
The House Minority Leader, Kingsley Chinda, asserted there is a consensus for the review of the nation’s tax laws, stressing however, that there are areas of worry in the bills.
“We all agree that our tax laws need rejigging. The spirit behind the bills is good but there are issues with some of the letters. We support the bill to go for second reading,” he said.
Like Soli, Ahmed Jaha (APC, Borno) said though the governors had accepted the reversed derivation components of the bill, the term was not defined in the proposed legislation.
“I hold a different position from the governors. They have not told us what derivation means. Is it consumption derivation or derivation based on generation? We don’t have technologies to track consumption,” he insisted.
For Muhammed Ciroma (NNPP, Kano), the Office of the Executive Chairman of the Federal Inland Revenue Service should be separated from that of the Tax Revenue Board for accountability and transparency.
In his contribution, the lawmaker representing Ikorodu Federal Constituency, Babajimi Benson, said, “The tax bill has given a lot of money to the states. The Federal Government has reduced its stake from 15 per cent to 10 per cent by giving five per cent to the states.
“It (the federal government) also allows states to collect stamp duties. This will ensure equity, justice and fairness.”
Echoing a similar argument, Nnaji Nnolim (PDP, Enugu) said when passed into law, the federal and state governments should endeavour to deploy more funds to provide basic amenities for the people.
“I feel that if this tax bill is passed, the funds generated should be properly utilised. The funds generated should be channelled toward the provision of basic amenities that will enhance the livelihood in our country.
“It should be channelled to public utilities like electricity because a country like Nigeria does not have constant electricity. I also believe that we should enhance and increase funds for health,’’ he noted.
Also speaking, Abubakar Fulata called for the insertion of an interpretation clause in the proposed reforms, adding, “A bill without an interpretation clause is subject to abuse and the whims and caprices of whoever is going to interpret it.”
He called for deletion of the clause which proposed the phasing out of the Tertiary Education Trust Fund and other agencies of the government.
Continuing, Fulata stated, ‘’As a Muslim, we don’t tolerate inheritance tax. You don’t take away from the property, from the wealth of the orphan, and give it away to any other person.”
Rivers lawmaker, Cyril Hart, drew the attention of the House to Section 85 of the bill, saying, “It talks about giving production credits for those who are producing gas. Thirty per cent of the fiscal gas price will be given to them as credits.
“You are aware that today the non-oil sector contributes about 90 per cent of our GDP, whereas the oil sector contributes about five per cent of our GDP. Well, the irony of that statement is that this five per cent of the oil sector contribution to the GDP is what constitutes 60 per cent of funds or revenue to fund our budgets.
“It contributes 90 per cent of our foreign exchange. Therefore, we have to do a lot to ramp up production, and that is what Section 85 seeks to address,” he said.
The leader of the Labour Party caucus in the House, George Ozodinobi, described the tax reforms as a form of fiscal restructuring.
“From where I come from, we see this as a subtle restructuring of this great nation. It is also a kind of handshake across Niger to our people,” he asserted.
