As the National Assembly considers the proposed tax reforms bills, the Citizens Network for Peace and Development in Nigeria (CNPD) has rejected the Nigeria Governors Forum’s (NGF) proposed VAT sharing formula, which allocates 50% based on equity, 30% based on derivation, and 20% based on population.
CNPD’s National Coordinator, Mr Okorie Ikechukwu Raphael, at a press conference held in Abuja on Friday, argued that the NGF formula does not take into account productivity and economic growth, which are critical factors in determining a state’s contribution to the national economy.
CNPD contended that by ignoring productivity, the formula may inadvertently penalize states that are making concerted efforts to diversify their economies and promote economic growth.
CNPD urged the National Assembly to reconsider the proposal and adopt a more nuanced approach that rewards productivity and economic growth.
CNPD maintained that there is no gainsaying the fact that the proposed tax reform bills have the potential to ensure that revenues derived from taxes are channelled into critical sectors such as education, healthcare, and rural development, thereby reducing poverty and inequality.
“The proposed law focuses on inclusive taxation. Consequently, this reform is aimed at stimulating small and medium-scale enterprises (SMEs), encouraging grassroots entrepreneurship, and fostering economic diversification, as well as sustainable growth for future generations,” the group noted.
“Specifically, we commend the Tax Reform Bill’s provisions that exempt individuals and households earning less than #1 million per year and companies earning less than 50 million per year from taxation. This bold initiative demonstrates the government’s commitment to alleviating poverty and promoting economic inclusivity.
“By shielding low-income earners and small businesses from the tax burden, the Bill will undoubtedly stimulate economic growth, create jobs, and improve living standards. Given its pro-poor orientation, we strongly advocate for an accelerated passage of the Tax Reform Bill to ensure its timely implementation and realization of its benefits for the most vulnerable segments of our society.”
Applauding President Bola Ahmed Tinubu and his economic team for conceiving the idea behind the Tax Reform Bill, CNPD stressed that if passed into law and implemented with the right focus and fairness, the Bill has the potential to be a cornerstone for poverty alleviation and just economic redistribution in Nigeria.
The group thereby called on the National Assembly to uphold this pro-poor agenda and urge all stakeholders to prioritize the interests of the common man over parochial interests.
They added: “The Tax Reform Bill reiterates the opinion of many that trust in the system is crucial. For this reason, revenues generated through this reform must be transparently managed and accounted for in order to ensure they serve their intended purpose.
“Thus, the Bill represents national interest and must not be reduced to divisive politics or regional disagreements. We must guide our unity in our diversity and strengthen the fact that what affects one Nigerian, affects every other person.
“In the same vein, we recommend strongly that as law-abiding citizens, it is only right to allow the course of lawmaking to prevail. As such, the Public Hearing stage of this process is positioned to collate various inputs and enhance the people’s input into decision-making that affects them. Therefore, those calling for reviews must have a rethink and allow the lawmaking process to commence instead of appearing to scuttle a legitimate democratic process.”
