The Federal Government should adopt a more methodical approach to convince Nigerians of the genuineness and public interest nature of its proposed tax reform, which has unfortunately been embroiled in controversies.Going by the explanation of the government through the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, that the reforms are well intended, there is a need for a more holistic approach.Oyedele had said that the proposed reforms are aimed at enhancing efficiency and ensuring equity among States in the sharing of Value Added Tax (VAT). Certainly, as the Speaker of the House of Representatives, Tajudeen Abbas, also noted, “in every modern state, taxes are the bedrock of public revenue, providing the resources required to deliver education, healthcare, infrastructure, and security.”In early October, President Bola Tinubu transmitted to the National Assembly a bill seeking to repeal certain taxation laws, consolidate the multiple legal frameworks and streamline transactions and related matters.
Expectations were that the reform would deliver an efficient tax administration system that is acceptable to all.However, the proposal has generated a wave of controversy and distrust, which may not be unconnected with the present economic hardship in the land, coupled with perception that the government is more interested in generating revenue at all cost and without commensurate consideration for the average Nigerian.
That shouldn’t be if extensive conversations were held and relevant segments carried along, and the gains sufficiently explained.Incidentally, Abbas has said that the House is yet to take a position on the four tax reform bills transmitted to the parliament, promising that the House would scrutinise the proposed legislations thoroughly to ensure they align with the interest of Nigerians. The lawmakers should be professional in their scrutiny and play less politics.What is important, as the Speaker observed, is that the tax bills are aimed at diversifying the country’s revenue base, as well as fostering a conducive environment for investment and innovation.
Earlier, Oyedele had assured that the extant legal framework is complicated and retards economic growth without clear and consistent policy guidelines. The system is also old and weak and fraught with multiple levies.The highlights of the proposed reform are: to seek to reduce tax burden on individuals and businesses and promote ease of doing business; reduce tax to single digit number; harmonise revenue administration for efficiency; increase tax to GDP ratio; enhance competition in the economy and remove low-income earners from the tax net.In all, four executive bills were drafted to actualise the reform process: the Nigeria Tax Bill 2024, to provide the fiscal framework for taxation in the country; Nigeria Tax Administration Bill, to provide a clear and concise legal framework for all taxes in the country; Nigeria Revenue Service (Establishment) Bill, to repeal the Federal Inland Revenue Service Act and the Joint Revenue Board (Establishment) Bill, to create a tax tribunal and a tax ombudsman.President Tinubu had promised in his inauguration address to correct cases of multiple taxation and inefficiencies in tax administration in the country.
He promised to dismantle hurdles that impede investment and introduce ease of doing businesses for individuals and corporate organisations. However, citizens have become wary of government reforms, having suffered repercussions on similar reforms in energy and power sectors.
