An amalgamation of Islamic groups under the umbrella of Islamic Forum for Unity of the Ummah (IFUU) has concluded arrangements to meet Wednesday to discuss the controversial Tax Reform Bills introduced by President Bola Ahmed Tinubu-led administration.
According to the group, sensitive government policy such as the proposed tax reforms, needed wider consultations with stakeholders, groups and the citizens before being passed into law.
President Tinubu had, on September 3, transmitted four tax reform bills to the National Assembly for consideration.
But in a statement jointly signed by the Chairman, Mallam Adam Awwal Muhammad and Secretary, Sheikh Akanbi Rashidi Bolaji, the IFUU expressed concerns over the rejection of the bills by northern governors and National Economic Council (NEC) recommendation for withdrawal.
The statement further said: “At the meeting convened by Sheikh Mustapha Al-Arabi convener, members of Islamic groups are expected to discuss the content of bills with regards to interest and economic implications as well as benefits to Muslim communities across the country and take a stand.”
It also hinted that the decision to meet over the controversial tax reform bills stemmed from the concerns raised in some quarters over the new derivation-based model for VAT distribution and the contents of the bills, which the northern governors claimed did not align with the interests of the North and other sub-national entities.
While noting that the bills have not been presented for a second reading where the principles of the bills will be debated, it stated: “We don’t want to be Hoodwinked into accepting a tax reform the will affect our people and their economic well being, thus our decision to meet and get informed knowledge about the reforms before taking a stand.”
The Forum further said: “We have read the recommendations of the Presidential Committee on Fiscal and Tax Reforms headed by Taiwo Oyedele, for the review of existing tax laws.
“From the document read, we observed that the bills are the Nigeria Tax Bills are expected to provide the fiscal framework for taxation in the country, and the Tax Administration Bill, which will provide a clear and concise legal framework for all taxes in the country and reduce disputes.
“We noticed it proposes several key changes, that include a gradual increase in Value Added Tax (VAT) from 7.5% to 15% by 2030 and an adjustment in Company Income Tax, which would set a rate of 27.5% for large companies, reducing to 25% by 2026.
Additionally, the bill proposes a 4% development levy on companies to fund the Student Education Loan Fund, along with a 5% excise duty on sectors such as lottery, gaming, and telecommunications.
“We hope that the issues of transparency, particularly through provisions requiring price transparency and monitoring of publication costs are upheld.”
…LCCI tasks FIRS on technology
Meanwhile,the Lagos Chamber of Commerce and Industry (LCCI) has called on the Federal Inland Revenue Services (FIRS) to adopt a technological innovative system for smooth operations.
President LCCI Gabriel Idahosa said this in Lagos during the FIRS special day at the Lagos international trade fair.
The LCCI acknowledged the transformative strides taking place at the FIRS.
He said investing in analytics and AI would enable FIRS to predict revenue patterns and enforce targeted compliance measures, as well as improving tax collection efficiency.
According to him, “fully digitizing FIRS operations, as seen in Rwanda, would improve efficiency, reduce costs, and make tax processes more accessible.”
Suggesting five ways the agency can create a unified tax system that will reduce redundancies and simplify tax compliance in Nigeria, he said: “Targeted outreach, especially within the informal sector, could foster a culture of compliance. Collaborating with trade associations could help educate these segments effectively.
“Training FIRS’s workforce in global tax practices would ensure the agency remains agile in an evolving economic landscape.”
He, however, said “having greater cooperation with state tax agencies could create a unified tax system, reducing redundancies and simplifying tax compliance.”
Expressing the need for an effective tax system, the LCCI president said: “Effective tax governance is an integral component of the ease of doing business concept. As we all know, businesses need the support and cooperation of key regulatory institutions like the Federal Inland Revenue Service (FIRS) to thrive and be competitive.”
He also urged the FIRS to address “the lingering issues in the tax system which include complication in tax computations, rigorous process in tax payment, multiplicity of taxes from multiple revenue collection agencies across the three tiers of government, inadequate knowledge and information about tax regulations especially on tax issues.”