President Bola Tinubu’s Senior Special Assistant on Media and Publicity, Temitope Ajayi, has explained ways in which the controversial Tax Reform Bills will enrich states.
Recall that on Tuesday, in order to ensure the passage of the controversial tax reform bills at the National Assembly, Tinubu ordered the Ministry of Justice to work closely with the lawmakers to address the concerns raised by Nigerians.
The bills – the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill – have faced scrutiny from state governors, public institutions and other relevant stakeholders.
In his address when he was featured as one of the panellists on Channels Television’s Townhall on Tax Reforms on Monday, the Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, noted that the objective of the tax reform bills is to fix Nigeria’s economy for shared prosperity and not to generate more money as being speculated.
“Our economy is underperforming. We are not growing enough, poverty is widespread and we do not have inclusive and sustainable growth, and there can’t be shared prosperity unless we address those issues. While we face a myriad of issues, the fiscal system, including taxation clearly, is one major area.
“If I want to summarise it, I would say that the fiscal and tax system is like the knee on the neck of our economic prosperity as a people. It is important to state that the primary objective of the reforms is not to generate more revenue. I see people get that wrong every time. It is to fix the economy in a way that there can be shared prosperity,” Oyedele stated.
Among the state governors who’ve stood their ground against the passage and implementation of the bills is Borno State Governor, Prof Babagana Zulum.
He urged his colleagues and Northern stakeholders to reject the bills, insisting that they would damage the region’s economy if implemented.
Zulum said, among others, “This is not opposition. Based on our understanding, this bill will destroy the North entirely. We call on President Tinubu to review this decision. He secured 60% of his votes from the North. He should not listen to those telling him the North is not supporting him. What we need is the withdrawal of these tax bills.”
However, in a tweet shared on Wednesday Ajayi explained “10 ways the Tax Bills will make states richer” as stated below:
1. The Federal Government will cede 5% out of its current 15% share of the Value-Added Tax revenue to states.
2. The bills will transfer income from the Electronic Money Transfer levy exclusively to states as part of stamp duties.
3. The bills seek to repeal obsolete stamp duty laws and re-enactment of a simplified law to enhance the revenue for states.
4. Under the new dispensation the tax bills will usher in, and states will be entitled to the tax of Limited Liability Partnerships.
5. When passed by the National Assembly, the tax bills will enable the state government to enjoy tax exemption on their bonds to be at par with federal government bonds.
6. Under the proposed tax reform, states will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income.
7. Integrated tax administration will provide tax intelligence to states, strengthen capacity development and collaboration, and scope of the Tax Appeal Tribunal to cover taxpayer disputes on state taxes.
8. The proposed tax laws grant powers for the Accountant-General of the Federation to deduct taxes unremitted by a government or Ministries, Departments and Agencies; and pay to the beneficiary sub-national government on personal income tax of workers of federal institutions in states.
9. The bills will serve as a “framework to grant autonomy for states internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism.”
10. Legal framework for taxation of lottery and gaming, and the introduction of withholding tax for the benefit of states.
Ajayi stressed that the bills are not “injurious to the states. Apart from streamlining the tax system in Nigeria and catalysing economic output, the tax and fiscal policy reforms provide incentives for states to become economic powerhouses.”
The president’s media aide urged state governors to invest in “manpower and critical social and physical infrastructure in their states that will support businesses and socio-economic activities to flourish.”
