Tax Reform Debate Suspended Indefinitely

Tax Reform Debate Suspended Indefinitely Amid Northern Governors’ Pressure

 

The House of Representatives has indefinitely suspended the much-anticipated debate on the Tax Reform Bills initially scheduled for December 3, 2024. This decision comes amid mounting opposition from the 19 northern governors and 73 lawmakers from the region. The controversy underscores deep regional and political divides over the proposed fiscal policies.

 

Suspension of the Debate

 

A memo dated November 30, 2024, and signed by the Clerk of the House of Representatives, Dr. Yahaya Danzaria, announced the postponement. Titled “Rescheduling of Special Session on Tax Reform Bills,” the document cited the need for broader consultations with stakeholders as the reason for the delay.

 

The memo stated:

“I am directed by the House leadership to inform all Honourable Members that the special session, initially scheduled for Tuesday, December 3, 2024, to discuss all the tax reform bills, has been postponed to a later date… A new date and venue for the session will be communicated in due course.”

 

This decision follows mounting resistance from various lawmakers and northern leaders, including 48 representatives from the North-East, 24 federal lawmakers from Kano, and former Sokoto State Governor, Senator Aminu Tambuwal.

 

Lawmakers’ Opposition and Regional Concerns

 

A leaked video has revealed heated debates among northern lawmakers during a closed-door session. Representative Ahmed Jaha, from Damboa/Gwoza/Chibok Federal Constituency in Borno State, voiced the concerns of his colleagues from the North-East, describing the bills as detrimental to their already struggling region.

 

“North-East, even before the insurgency, was the poorest region in Nigeria. Today, our people have been turned into beggars. Billionaires of yesterday now queue up in IDP camps to collect food,” Jaha said. “If other parts of the country were in our shoes, even this sitting would not be possible.”

 

Similarly, lawmakers from the North-West argued that the bills were being rushed without adequate consultation. “The speed with which they want these bills considered and passed is suspicious,” one lawmaker noted. “Our governors and we, their representatives, are not convinced about the arguments in favor of these bills.”

 

The Northern Governors’ Stance

 

The Northern Governors Forum has been vocal in its opposition to the Tax Reform Bills, particularly the Value Added Tax (VAT) sharing formula proposed in the legislation. In a meeting held in Kaduna on October 29, 2024, the governors directed their federal lawmakers to vote against the bills unless their concerns were addressed.

 

The governors’ stance reflects broader fears that the reforms could disproportionately affect their region’s already fragile economy. These concerns were echoed by Borno State Governor Babagana Zulum, whose remarks last week reportedly intensified the pressure on lawmakers to delay the debate.

 

Details of the Tax Reform Bills

 

The bills, transmitted to the National Assembly by President Bola Tinubu on September 3, 2024, aim to overhaul Nigeria’s fiscal landscape. They are the product of recommendations from the Presidential Committee on Fiscal and Tax Reforms, led by Taiwo Oyedele.

 

The proposed legislation includes:

1. Nigeria Tax Bill 2024: Establishes a unified fiscal framework for taxation.

2. Tax Administration Bill: Provides a legal framework to streamline tax processes and minimize disputes.

3. Nigeria Revenue Service Establishment Bill: Repeals the Federal Inland Revenue Service Act to establish a new tax body.

4. Joint Revenue Board Establishment Bill: Introduces a tax tribunal and ombudsman to resolve disputes.

 

Despite these proposals, the Northern Governors Forum has consistently opposed the reforms, urging broader consultation with stakeholders. Their opposition aligns with the National Economic Council’s advice in October for the Federal Government to withdraw the bills temporarily to address regional concerns—a suggestion rejected by the presidency.

 

Rising Political Tensions

 

The debate over the Tax Reform Bills has highlighted growing regional tensions and mistrust. Critics argue that the reforms favor certain regions and economic classes while neglecting the unique challenges faced by the North. The Tajudeen Abbas-led House leadership has attempted to build consensus, but internal resistance remains strong.

 

“The bills may not have a smooth ride in the House,” a lawmaker observed. “It’s clear that these reforms have not been adequately debated at the regional level, and pushing them through now will only exacerbate divisions.”

 

What Lies Ahead

 

The indefinite suspension of the debate signals the need for more dialogue and compromise. As lawmakers and stakeholders continue consultations, the future of the Tax Reform Bills remains uncertain. The controversy underscores the complexity of implementing nationwide fiscal reforms in a country marked by deep regional disparities and political sensitivities.

 

For now, the postponement buys time for negotiations, but the path to achieving consensus on these critical reforms appears fraught with challenges.