THE Senate leadership has directed its committee on finance to suspend further action on the proposed tax reform bills pending the outcome of a high-level meeting with the attorney general of the federation (AGF).
The deputy senate president, Barau Jibrin, announced on Wednesday, December 4, during plenary that a special committee had been constituted to address contentious issues in the bills, with the meeting scheduled for tomorrow, Thursday, December 5.
The decision to set up the committee followed a series of deliberations by lawmakers aimed at resolving disagreements over key provisions in the proposed legislation.
The meeting is expected to serve as a platform for lawmakers to harmonise their positions and ensure that the bills align with national priorities while addressing stakeholder concerns.
Presidency speaks on gains of bills
Despite the promise of centralising Nigeria’s tax system and rewarding sub-nationals, the bills have sparked debates among mostly northern political elites.
Consequently, the senior special assistant to the president on media and publicity, Temitope Ajayi, in an explanatory statement on Wednesday, has shed more light on the bills.
Ajayi listed 10 ways the bills would serve the states better and enhance their capacity to earn more revenue as follows:
1. The Federal Government will cede five per cent out of its current 15 per cent share of VAT revenue to states.
2. The bill will transfer income from the electronic money transfer levy exclusively to states as part of stamp duties.
3. The bills seek to repeal obsolete stamp duty laws and re-enactment of a simplified law to enhance the revenue for states.
4. Under the new dispensation, the bills will usher in, and states will be entitled to the tax of limited liability partnerships.
5. When passed by the National Assembly, the tax bills will enable the state government to enjoy tax exemption on their bonds to be at par with Federal Government bonds.
6. Under the proposed tax reform, states will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income.
7. Integrated tax administration will provide tax intelligence to states, strengthen capacity development and collaboration, and scope of the Tax Appeal Tribunal to cover taxpayer disputes on state taxes.
8. The proposed tax laws grant powers for the accountant general of the federation to deduct taxes unremitted by a government or MDA and pay to the beneficiary sub-national government on personal income tax of workers of federal institutions in states.
9. Framework to grant autonomy for states’ internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism.
10. Legal framework for taxation of lottery and gaming and introduction of withholding tax for the benefit of states.
The ICIR reported that the National Economic Council (NEC) has advised President Bola Tinubu to withdraw the bills from the National Assembly.
The NEC cited the need for more consultations and consensus-building among Nigerians before the National Assembly work on the bills.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.
Let the States be responsible for the collection of taxes and remit 20% to the Federal Boss of Nigeria.