After Wednesday’s hot exchange and a threat by some Senators to boycott debate on them, the four tax bills forwarded by President Bola Ahmed Tinubu, passed for second reading through voice votes on Thursday.
The President had transmitted the four tax reform bills to the National Assembly on October 3, 2024.
Following the passage, the bills were thereafter referred to the Committee on Finance. The Committee was asked to revert to the Senate in not more than six weeks.
The tax reforms bills have generated heated controversy as Northern governors and other strategic stakeholders insisted that they be withdrawn to enable wider consultations. They believed the tax reforms, as proposed, would undercut the interest of the North, hence the need for further consultations.
Senators Ali Ndume was the most vociferous voice against the introduction of the bills. He thought the Senate was too much in a hurry and should make haste rather slowly.
Senator Ndume maintained that : “Reforms are necessary, I am not against any reforms. My problem is the timing….
“One will be at the public hearing and the issue of derivation because the Constitution has to be amended before some of the proposals of the Bill can be affected.
“This bill should be withdrawn, we work on it and submit it after getting the buy-in of the Governors, Traditional Rulers and the NEC.
“I looked at the bill and it contains so many but these two things VAT and Derivation. You negotiate first before we come to take a position.
“It looks attractive but it may not be what it is. If you move a tax burden to the manufacturer he will transfer it to the consumer.
“In the bill, we say a reduction from 30% to 25% which means that the person in Nnewi that is no longer able to make Billions, you are charging him with the same person that is just sitting down doing Nothing.”
Though Ndume agreed that reforms were a necessary condition to overhauling Nigeria’s tax system and reducing the tax burden on Nigerians, especially low-income earners, Senator Ndume believed the timing was not right and certain provisions of the bill needed to be reviewed.
With the reported crooked parts straightened, Ndume argued, the entire tax reforms bills could be passed “in less than 24 hours”.
However, the Chief Whip strongly opposed the suggestion that the bills be withdrawn and reintroduced, insisting that the process advance to the public hearing stage.
“The bill should scale second reading and undergo thorough examination during the public hearing. Afterward, it can be subjected to clause-by-clause consideration.”
The session was so heated that the Senate decided to go into a closed-door session to discuss the bills. The closed-door session lasted one hour.
In the end, the Senate passed the four tax reforms bills through for a second reading.
The bill for an Act to Establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombud as part of Tinubu’s comprehensive tax reform package.
The proposed legislation seeks to harmonize, coordinate, and resolve disputes arising from revenue administration in Nigeria.
Owing to the intense interest generated by the introduction of the bills, the Presidency repeatedly assured that the tax reforms bills were not targeted at any particular region but to develop the country as a whole.
