Political Activist and Civil Society Leader, Dr. Usman Bugaje, has accused President Bola Tinubu of acting like a monarch in his approach to the proposed Tax Reform Bills.
The activist and scholar said the controversial tax reform bill should be “put in the dustbin” over what he called “out of touch with reality.”
In an interview he granted on Thursday on Arise, he said the bill does not align with Nigeria’s economic reality and could worsen hardship and insecurity.
President Tinubu transmitted four tax reform bills to the National Assembly on October 3, 2024, but the bill was greeted with opposition particularly from Northern legislators.
In the existing tax law, states normally use the 50:30:20 sharing ratio — 50 per cent for equality, 30 per cent for population, and 20 per cent for derivation.
If the bill scales through the National Assembly, states will use the sharing ratio of 20:20:60 — equality, population, and derivation respectively.
But the new bill stated, “Notwithstanding any formula that any other law may prescribe, the net revenue accruing by virtue of the operation of chapter six of the Nigeria Tax Act shall be distributed as follows: (a) 10 per cent to the Federal Government; (b) 55 per cent to the State Governments and the Federal Capital Territory; and (c) 35 per cent to the Local Governments.
“Provided that 60 per cent of the amount standing to the credit of states and local governments shall be distributed among them on the basis of derivation.”
Bugaje said, “The governors rejected it and taxation is on the concurrent list. And the president is saying this is sacrosanct. Sacrosanct how? A bill in the front of the National Assembly has to go through the normal process and the president is beginning to behave like a monarch in a way.
“In the constitution of the Federal Republic of Nigeria, you will find the constitution in arranging and sequencing government, the National Assembly comes first, the executives come second. How can a president speak about a bill that is presented to the National Assembly as sacrosanct?”
Bugaje said the Presidential Tax Reform Committee led by tax expert, Taiwo Oyedele has no clear understanding of the country’s economic and regional diversities.
“I have engaged Mr. Taiwo who leads the team that went along to craft the nearly 300-page tax reform bill. It doesn’t appear that this team understands the society for which that policy is made.
“This looks very much like some professionals living in Lagos and Abuja who have no idea of the consequences of what they are proposing.
“There are attempts in the bill to soften or make things easy for the struggling citizens but on the other hand there are major things they have done to create a kind of disparity within the states and even the bill has not defined the most controversial issues like: what is attribution? what is derivation?”
According to him the lack of clarity on issues will result in further rejection.
He added, “My thinking is the proper thing is for the Tax Reform Bill to be completely put in the dustbin. Then a process started. I do appreciate tax reforms. We should broaden the net and many people are supposed to be paying.
“There are certain things that should be addressed, also.”