Tinubu rejects NEC advice to withdraw tax reform bills

President Bola Tinubu has turned down the advice of the National Economic Council (NEC) to withdraw the tax reform bills.

The president rejected the recommendation of NEC on Friday evening in a statement signed by his Special Adviser on Information & Strategy, Bayo Onanuga who also gave reasons for the rejection.

“President Bola Tinubu has received the National Economic Council’s recommendation that the tax reform bills already sent to the National Assembly be withdrawn for further consultation,” Onanuga said.

“President Tinubu commends the National Economic Council members, especially Vice President Kashim Shettima and the 36 State Governors, for their advice.

“He believes that the legislative process, which has already begun, provides an opportunity for inputs and necessary changes without withdrawing the bills from the National Assembly.”

While urging the NEC to allow the process to take its full course, Onanuga said Tinubu welcomes further consultations and engagement with key stakeholders to address any reservations about the bills while the National Assembly considers them for passage.

He said when the president set up the Presidential Committee on Tax and Fiscal Policy Reform in August 2023, he had only one objective: to reposition the economy for better productivity and efficiency and make the operating environment for investment and businesses more conducive.

This objective, according to the president’s media aide remains more critical even today than ever before.

He said the committee worked for over a year and received inputs from various segments of society across the geopolitical zones, including trade associations, professional bodies, different Ministries and Government Agencies, Governors, traders, students, business owners, and the organised private sector.

The tax reform bills that emerged were distilled from the extensive work of the Presidential Committee.

The tax bills before the National Assembly aim to streamline Nigeria’s tax administration processes, completely overhaul the nation’s tax operations, and align them with global best practices.

The four bills that are currently generating controversy are: The Nigeria Tax Bill: This Bill seeks to eliminate multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals nationwide.

The second one is the Nigeria Tax Administration Bill (NTAB): This Bill proposes new rules governing the administration of all taxes in the country. Its objective is to harmonise tax administrative processes across federal, state and local jurisdictions to ease taxpayers’ compliance and enhance the revenue for all tiers of government.

The third is the Nigeria Revenue Service (Establishment) Bill: The Bill seeks to re-establish the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) to better reflect its mandate as the revenue agency for the entire federation, not just the Federal Government.

The last one is the Joint Revenue Board Establishment Bill: This Bill proposes creating a Joint Revenue Board to replace the Joint Tax Board, covering federal and all state tax authorities. The fourth bill will also establish the Office of Tax Ombudsman under the Joint Revenue Board, protecting taxpayers’ interests and facilitating dispute resolution.

Onanuga added that the bills’ overarching objective is to effectively coordinate federal, state, and local tax authorities, thereby eliminating the overlapping responsibilities, confusion, and inefficiency that have plagued tax administration in Nigeria for decades.

He said under existing laws, taxes like Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), Value-Added Tax (VAT), and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.

“The proposed reforms seek to consolidate these numerous taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation,” he explained.

While there may be differences in approach or specific provisions of the new tax bills, Onanuga said what is not in contention is the need to review our tax laws and how we administer them to serve our overall national development agenda.

He added that President Tinubu will continue to respect and welcome the advice and recommendations of the National Economic Council, an essential constitutional organ of government on economic matters.

At the 144th meeting of the NEC, presided over by Vice President Kashim Shettima, the council recommended the withdrawal of the bills, with the recommendation coming after governors of the 19 northern states, who met in Kaduna on Monday, alongside prominent traditional rulers from the region, resolved, among others, to reject in totality the Nigeria Tax Reform Bill.

In a communiqué issued at the end of the meeting, the northern governors and monarchs kicked against the contents of the recent Tax Reform Bill.

They lamented that the bills were against the interests of the North and other sub-nationals, especially the proposed amendment to the distribution of the Value Added Tax (VAT).