FEC vs. NEC: Examining tax reform bills and FIRS’s Zacch Adedeji’s explanation

President Bola Tinubu’s recent submission of four executive tax reform bills to the National Assembly has sparked a heated debate. Central to the controversy is Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), whose clarifications on the reforms have yet to clear the air but intensified discussions.

At first glance, the four bills appear to serve distinct purposes: The Nigeria Tax Bill seeks to harmonize various tax laws to reduce multiplicity; the Nigeria Tax Administration Bill focuses on standardizing tax processes and compliance requirements; the Nigeria Revenue Service Bill aims to replace the FIRS Act and establish a National Revenue Service (NRS) to collect domestic and international revenues; and the Joint Revenue Board Bill will create a framework for resolving revenue conflicts between states and local governments.

A key aspect of these proposals involves replacing the FIRS with the NRS, which would become a central and most powerful revenue service in the country. The NRS will be the only agency responsible for collecting all government revenues, including those currently managed by other agencies in oil, customs, port, and other sectors. It will be more powerful and influential than the Central Bank of Nigeria (CBN) and Nigerian National Petroleum Company (NNPC) and others.

Another contentious point is the proposed Value Added Tax (VAT) distribution model. Under the new framework, states receiving VAT collections would retain significant revenue. However, some northern leaders fear this model will disproportionately benefit states where companies are headquartered rather than those where goods and services are consumed.

In a statement from Gombe State Governor Muhammad Inuwa Yahaya (Chairman of the Northern Governors Forum), northern governors oppose the proposed derivation-based VAT distribution model, citing concerns that it would disadvantage their states. They reaffirmed their commitment to national development while emphasizing the need for equity in policy implementation to prevent any geopolitical zone from feeling marginalized.

The governors urged federal legislators to reject any legislation perceived as unfavourable to any region. The communiqué stated: “The Forum is concerned by the recent Tax Reform Bill sent to the National Assembly, especially the proposed shift to a derivation-based VAT distribution model, which disadvantages the North.”

Consequently, the next day, the National Economic Council (NEC), chaired by Vice President Kashim Shettima, recommended President Tinubu withdraw the Tax Reform Bills from the National Assembly. In attendance at the 144th NEC meeting, which was held at the State House in Abuja, were governors and Federal Executive Council (FEC) members, including Finance Minister Wale Edun and Budget and National Planning Minister Abubakar Bagudu.

Oyo State Governor Seyi Makinde remarked that the council recognized the necessity for further understanding and alignment on the bills, stressing that more comprehensive consultations would be in the nation’s best interest.

President Tinubu said he would not withdraw the proposed tax reform bills despite this recommendation by governors and federal cabinet members in NEC. His spokesperson, Bayo Onanuga, indicated that the president believes the legislative process should continue, allowing room for input and adjustments through public hearings. Tinubu remains committed to reforming Nigeria’s tax system, he assured.

Through the proposed bills, the government aims to streamline tax administration, enhance efficiency, and align with global best practices. The bills—the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board Establishment Bill—seek to unify tax processes, reduce overlapping responsibilities, and simplify compliance for businesses and individuals.

It is widely believed that FIRS Chairman Zacch Adedeji is the driving force behind these reform proposals. His educational background, prior positions, and current role have established him as one of the most influential figures in the Tinubu administration. Born on January 8, 1978, in Ogbomosho, Oyo State, Adedeji graduated with first-class honours in Accountancy from Obafemi Awolowo University (OAU), Ile-Ife, where he also obtained his Master’s and PhD in the same field.

Adedeji’s professional journey started at Procter & Gamble (P&G) as Corporate Finance Manager for West Africa and later as Finance Leader for SAP Implementation. He also served as Finance Commissioner in Oyo State under Governor Isiaka Ajimobi (2011–2015) and was appointed Executive Secretary of the National Sugar Development Council (NSDC) by President Muhammadu Buhari before becoming the FIRS Chairman under President Tinubu.

While his political ambition is fuzzy—having avoided any major controversy—some suspect his positions on tax reform and proposed legislation harbor hidden agendas. In light of these concerns, he proactively engaged with members of the National Assembly following the submission of the bills. He addressed both the Senate Committee on Finance, chaired by Senator Sani Musa, and the House of Representatives Committee, led by Hon. James Faleke.

Adedeji articulated the reforms’ goals, highlighting the need to balance existing tax laws, streamline administration, and align Nigeria’s tax system with global standards. Noting that the reforms aim to enhance transparency and improve efficiency in revenue collection, he said the changes would adapt to the realities of the digital economy and position the country attractively for investment. Adedeji confirmed that no additional taxes would be introduced in line with President Tinubu’s commitment to “not taxing poverty and inflation.”

However, speculations will undoubtedly continue until the full details of the tax reform bills are released to the general public. The discrepancy between President Tinubu’s stance and Vice President Shettima-led NEC’s recommendation only adds to the confusion.

The contradiction between the FEC and the NEC is indeed puzzling, especially considering the All Progressive Congress (APC) controls governance at the national level and in many states. A unified and diplomatic approach would have been more effective in addressing the tax reform proposals unless the drama was a deliberate script for political purposes.

As the debate continues, Adedeji’s true intentions and the broader impact of these reforms on Nigeria’s economy remain in question. The outcome will shape the nation’s economic trajectory.

Yushau Shuaib is the publisher of PRNigeria & Economic Confidential
Email: [email protected]