Much Ado About Tinubu’s Harmonised Tax Reforms Bills

After initial hiccups and stiff opposition, both the Senate and House of Representatives have passed the harmonized Tax Reforms  Bills, now waiting to be transmitted to President BolaTinubu for assent. AdedayoAkinwale reports.

Following the initial controversy generated by the four Tax Reforms Bills of President Bola Tinubu, the House of Representatives last  Wednesday passed the harmonised Bills for the third reading.

The tax reform bills submitted to the National Assembly by President Tinubu were read for the first time on the 8th of October, 2024.  The bills are: Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill.

However, debates on the bills were put on hold due to the controversy generated by the bills with some Northern lawmakers vehemently kicking against the bills.

The debates on the bills later degenerated into a North/South issue, especially as it regards the sharing formula of Value Added Tax (VAT).

Recall that the National Economic Council (NEC), a body that comprises the 36 state governors and Chaired by Vice President KashimShettima, had urged the president to withdraw the bills for further consultations.

Nevertheless, a defiant Tinubu refused, saying that all concerns should be channeled to the National Assembly.

At plenary last Wednesday, the lawmakers during the Committee of the Whole adopted the recommendations of the House and Senate Conference Committee co-chaired by Hon. James Faleke.

Faleke noted that the Conference Committee met and agreed on all areas of difference in the version passed by both chambers of the National Assembly.

He stated that there were 45 areas of difference in the Nigeria Tax Administration Bill — 12 areas of difference in the Nigeria Revenue Service Bill, nine areas of difference in the Joint Revenue Board Bill and 46 areas of difference in the Nigeria Tax Bill, adding that all grey areas were resolved ahead of the passage.

While the  conference committee agreed to retain the Senate version in some of the clauses, they also retained the House version in some others, making amendments in a few others.

Faleke added that the conference committee agreed on the imposition of a four per cent development levy on the assessable profit of all companies chargeable to tax under Chapters 2 and 3, except small companies and non-resident companies.

They also agreed that the levy shall be collected by the Nigeria Inland Revenue Service and paid into a special account created for the same purpose.

In the sharing formula, the committee agreed that 50 per cent of the tax would go to the Tertiary Education Trust Fund, 15 per cent to the Education Loan Fund (up from three per cent agreed by the House), and eight percent to the Nigeria Information Technology Development Fund.

In the same vein, it was agreed that the National Agency for Science and Engineering Infrastructure (NASENI) is to get eight per cent (down from 10 per cent earlier agreed by both chambers), the National Board for Technology Incubation (NBTI)  is to get four per cent from the fund, defence and security infrastructure is to get 10 per cent while cyber security fund will get five per cent.

Also,  the Social Security Fund, Nigeria Police Trust Fund, and National Sports Development Fund were excluded from the list of beneficiaries passed by the House of Representatives.

The committee also adopted a new clause 158, which imposes a five per cent surcharge on chargeable fossil fuel products provided or produced in Nigeria and shall be collected at the time a chargeable transaction occurs.

The controversial Value Added Tax sharing formula was not part of the areas of disagreement between the two legislative chambers.

Contributing, a member of the House representing Gwoza/Damboa/Chibok Federal Constituency, Borno State, Hon. Ahmed Jaha warned those who will clean up the bill not to tamper with any of the clauses passed.

He commended the leadership of the House for making the tax reform bills a success.

He said: “I know what actually transpired from day one to date. The pressure you have accommodated, the diplomatic approach you have employed to make this bill a reality.

“And after this I want to equally commend the Chairman of the Finance Committee. He has proved to us that he is not only an elder, but a very responsible elder on the floor of this House. Because we know he could have done a lot of pressure from people like us. And he gave us the opportunity to air out our views about the position of Nigerians on this bill and we thank you for that.

“Before I sit down, I want to throw a warning to the people that are crossing the T’s and dotting the I’s in a clean-up process as part of our resolution. We have resolved that while cleaning these documents, if T is not crossed as far as this bill is concerned, do not cross it.

“If I is not dotted, do not dot it. Because we have the content of what is passed, not only in the conference committee, but what was passed by the two chambers before we come to a conference committee level.”

In his remarks, House Deputy Speaker, Hon. Ben Kalu acknowledged that “It’s been a long journey and all this while he held the ground firmly without losing his cool, carrying everybody along. He (Faleke) deserved to be the chairman of that committee and even more, you have really persevered through diplomacy, you have employed every leadership tool to make sure that Nigeria received the best and we are proud of you. To be honest, I think from the leadership we are proud of you and also the leader of the House and the minority leaders.

“The truth is that on the part of the leadership of the majority, the leader also played a major role in making sure that stabilisation was there in the mind of those who were agitating and those who were supporting to get more information to support with the right information.

“The minority also was very conscious of making sure that the bill will not be only for the people, a certain group of people, but for all persons in Nigeria, for the benefit of all. It is this balanced opinion that has taken us, and that is what the parliament is supposed to be. We debate, we disagree, it doesn’t mean that we are enemies, we disagree until we get the best for the people we represent.

“I agree with Hon. Jaha, that this bill, that copy presented here by the chairman is a copy the Presiding Officers would like to see as it progresses to Mr. President. Nothing should be added to it, nothing should be removed. We are happy with what we have adopted.”