The Southern Caucus of the House of Representatives yesterday dismissed claims of a rift between southern and northern lawmakers over the contentious tax reform bills proposed by President Bola Ahmed Tinubu’s administration.

Speaking at a press conference in Abuja, the caucus, led by Nicholas Mutu, described the bills as serving the nation’s best interest and expressed their willingness to engage in dialogue with northern lawmakers who have voiced concerns about the reforms.

Mutu stated, “We in the Southern Caucus of the House of Representatives have met and we welcome the tax reform bills with so much excitement. We are open to dialogue. The bill is good for Nigeria and is a people-oriented bill. We are happy to have it.”

Shedding more light on the caucus’s stance, Babajimi Benson (APC, Lagos) said, “What the Southern Caucus is saying is that we are ready to take up our official responsibility of making laws for the nation. As we process the bill, inputs will be made from our various states and constituencies.

“We are in constant touch with our constituents and the states that we represent. Our aim is to give Nigerians a better tax law, not to play to the gallery or fuel a southern-northern divide. The National Assembly’s responsibility is to make laws for this country by receiving proposals, refining them, and passing them in the best interest of Nigerians.”

Benson added that the House is working collaboratively with the Senate to ensure the eventual passage of the legislation, which will incorporate amendments and innovations from both chambers.

Fred Agbedi (PDP, Bayelsa) and Pascal Agbodike (LP, Anambra) also attended the briefing, where they reiterated the caucus’s support for the proposed reforms.

The Southern Caucus expressed confidence that the bills, once enacted, would enhance Nigeria’s fiscal structure and economic growth. This came as Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reform Committee, reassured Nigerians that the proposed tax reforms were not influenced by President Tinubu or any other individual.

He emphasised that the committee’s recommendations resulted from extensive consultations with a wide range of stakeholders, including people with disabilities, Nigerians in the diaspora, private sector groups, government institutions, finance commissioners, and governors.

Oyedele made the clarification during the 2024 Tax Conference in Abuja, organised by the Tax Justice and Government Platform in collaboration with the Civil Society Legislative Advocacy Centre (CISLAC), ActionAid, Oxfam, and the Centre for Democracy and Development (CDD).

He stressed that the committee’s recommendations were guided by national interest and data rather than emotions or sentiments. According to him, the reforms are not dictated by any individual or entity but reflect the contributions of diverse groups consulted during the process.

He stated, “These reforms are not the president’s reforms or the reforms of the Federal Inland Revenue Service. They are the reforms of the Nigerian people. I can promise, with my reputation at stake, that no one, not even the president, dictated anything to our committee. All recommendations were the outcomes of extensive debates and consultations. Nothing was cast in stone; everything is open to discussion.”

The proposed tax reforms have stirred tensions between the Federal Government and state governors, with the latter calling for their withdrawal to allow for more consultations. While some governors appear to have softened their stance, Borno State Governor Babagana Zulum has urged his northern counterparts to reject the bills, citing concerns over their potential negative impact on the northern economy.

Oyedele reiterated that the committee cannot propose policy changes based on sentiments, noting that policy decisions must be driven by data. He explained, “Emotions are part of being human, but at the end of the day, we need data to support policy changes. It is not enough to be emotional; proposals must be grounded in evidence.” He further urged Nigerians to avoid focusing solely on the Value Added Tax (VAT) sharing formula, pointing out that the proposed reforms aim to drive development.

However, several stakeholders raised concerns over the VAT rate increase. Auwal Rafsanjani, Executive Director of CISLAC, expressed fears that raising the VAT on non-essential items would disproportionately impact low-income households. He said, “With diminished purchasing power, rising food and transport costs, and increasing rent and fuel expenses, the burden of a VAT hike will fall hardest on the poorest Nigerians.”

Rafsanjani suggested that rather than increasing VAT, the government should reduce unnecessary tax expenditures such as waivers for multinationals and oil companies and focus on taxing high net-worth individuals. He also called on the Presidential Committee to address challenges affecting the implementation of existing VAT exemptions and provide detailed data on compliance rates.

For her part, Regina Afiemo, Country Director of Oxfam in Nigeria, proposed a wealth tax targeting Nigeria’s richest individuals as an alternative. She noted that such a tax could generate over $6 billion yearly, which could be used to tackle poverty, hunger, and inequality.

According to her, a fair tax system that ensures the wealthy contribute their share would enable the government to invest in critical sectors such as education, healthcare, and food security. She also stressed the need for a shift in focus, noting that current policies, including VAT increases, have disproportionately affected low-income families.

The National Orientation Agency (NOA), in favour of the reforms, said the tax bills aim to address the challenge of multiple taxation and its effect on low-income earners.

The Director General of NOA, Lanre Issa-Onilu, made the disclosure yesterday during the launch of a nationwide sensitisation campaign in Ibadan, Oyo State capital.

Issa-Onilu, represented by Dr Ayoola Olufemi, Director of Health and Social Care, emphasised the importance of fair taxation for socio-economic development.

According to the DG, the reforms are intended to ease the financial burden on citizens while ensuring transparency and equity in tax contributions. He added that the measures would support national development, enhance public infrastructure, and establish a less onerous tax system that promotes accountability in government spending.

Meanwhile, the Students’ Wing of the Coalition of Northern Groups (CNG-SW) raised concerns over the proposed tax reform bills, describing them as a significant threat to education and development in Northern Nigeria.

In a statement issued in Abuja yesterday, the group highlighted the adverse impact the reforms would have on agencies such as the Tertiary Education Trust Fund (TETFund) and the National Information Technology Development Agency (NITDA), which play critical roles in advancing education and innovation.

National Coordinator of CNG-SW, Hassan Adamu, criticised the bills, warning that they would undermine key educational initiatives, especially in the north. Adamu pointed out disparities in the coverage of academic funding, particularly under the National Education Loan Fund (NELFUND). He noted that only a fraction of northern tertiary institutions are included in the scheme, leaving many students without access to critical financial aid.

Adamu also expressed concern over the potential misuse of the student loan scheme, predicting that public tertiary institutions may exploit it to hike tuition fees. “The economic reality makes such a hike catastrophic for students, leading to increased dropout rates, especially in the north, where institutions already face challenges,” he said.

The coalition further warned that the proposed redirection of funds from critical sectors to student loans would weaken the educational and technological infrastructure. “This bill risks creating a generation of youth trapped in unsustainable debt, mirroring the country’s chronic indebtedness,” Adamu added.

CNG-SW called on the federal government to suspend the reform process and engage in broader consultations. It also urged northern legislators and governors to critically review the bills and devise practical solutions to protect northern education.