Debate around the Tax Reform Bills currently before the National Assembly continues as the Minister of Budget and Economic Planning, Senator Atiku Bagudu, described the seeming controversy as showing democracy is alive in Nigeria.
Speaking to journalists after the bankers committee meeting in Abuja, Bagudu said the interest generated by the bill revealed that there will be a consensus on the country’s tax system.
According to the minister, at the end of the day the tax system will be better for it.
He said: “They should participate. It’s democracy! How did they get the opportunity to discuss it? It was not a decree that was signed. You discuss, you talk to your representative, you lobby, you explain, you ask, you interrogate. I have seen many people who have changed their views because of the knowledge they saw. Because when did we start VAT legislation? We started before; it is not a new tax. Yes. So if there is a proposal to review the rate that is debatable and make your inputs, see how it affects you.
“First and foremost, try to understand it. Don’t just judge, try to understand and like I said, compare it with other countries. In the UK, they have VAT legislation. A significant proportion of the accounting industry is based on VAT reconciliation, because VAT is a top one. A court in Port Harcourt even went as far as saying the federal government should not collect VAT but President Bola Tinubu as the leader of the country, says, look, let’s tidy it up. That’s what we want.
“It’s not a monologue. And we are dealing with a President, God bless him, who is very democratic. He listens to others. He expects people to make contributions. So, whatever legislation it is, let people make reasonable, respectable, proper nationalistic contributions so that we get a better outcome.”
…Background
When the tax reform bills were first introduced in the National Assembly, it was greeted with much opposition with many saying it was anti-people and would further impoverish Nigerians at the lower rung of the ladder.
They include the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill. Also, the proposed bill is expected to create a clearer tax framework for tax administration as well as establish bodies like the Tax Appeal Tribunal and the Office of the Tax Ombudsman.
Last week, President Bola Ahmed Tinubu directed the Ministry of Justice to liaise with the National Assembly to address concerns within and outside the legislature.
…Bagudu speaks further
Bagudu, while admitting that tax reforms globally have always encountered opposition, said the reform was necessary for the growth and development of the country.
“We have to recognise that some legislations, by nature, are difficult, even in advanced countries, tax legislation is a very big issue in economic development. It determines elections even in the US.
“Today, the British economy had a challenge when with tax, basically a mini budget that cannot be supported by the tax. Today, the British Prime Minister is facing a challenge because of taxation and debates about taxation. If you recall, historically, even in the 80s, Ronald Reagan, supply side economies, they are all tax issues.
“Today, Trump is talking about tariffs in a way that those are all about taxation. So, we are no different but what is happening in Nigeria is that there are laws that have been there for long. If one looks at one of the tax bills, particularly the one that is, I think, generating the most controversy, is about 24-page long, a lot of it with definitions, technical jargons that you need guidance in order to understand.
“Secondly, that legislation repealed about 12 laws that have been existing. So if you are a small scale businessman or businesswoman or a bank, you need a compliance unit that understands those 12 laws in order not to run a call of one. Equally, that legislation is amending other 19 laws, as well as revoking laws. So, again, why this controversy?” he said.
…It’s timely, says Idris
Also speaking on the gains of the planned tax reforms, Minister of information and National Orientation Mohammed Idris said the initiative is crucial and timely.
The minister also said the Nigeria’s tax administration system is due for reform in terms of design and implementation flaws, as well as taxpayers’ attitude.
He, however, called for constructive dialogue on the tax reform devoid of regional, ethnic and religious sentiments.
Idris stated this Saturday in Kaduna while speaking at the National Discourse on Tax Reform Bills, organised by the Kaduna Chapter of the Nigerian Institute of Public Relations (NIPR).
The theme of the dialogue was “Tax Reforms: The Role of Public Relations in Fostering Constructive Dialogue for National Economic Renaissance.”
Idris further said: “In a democracy, constructive dialogue is essential for the advancement of society. We must give voice to diverse opinions and respect those we disagree with. We will not always agree on all issues, but we must be guided by the fact that our common humanity, nationhood, and sense of patriotism unite us more than our differences.
“The Tinubu administration will never do anything to undermine the ideals of participatory democracy.
“Our mandate and responsibility for governing and reforming Nigeria came by way of democracy, and we will continue to live up to those very high democratic standards and expectations.”
The minister emphasised the urgent need to overhaul Nigeria’s tax system, describing it as plagued by outdated structures and a general mistrust among taxpayers.
“All over the world, effective taxation is important as a source of financial power for governments to provide social services for their citizens.
”However, there is plenty of reason to believe and assert that Nigeria’s tax administration system has become long overdue for reform, on account of design and implementation flaws as well as the general attitudes of taxpayers towards taxation.”
The minister commended the NIPR for organising the discourse aimed to foster dialogue on tax reforms and their role in the national economic renaissance.
Idris highlighted the significance of taxation, quoting Benjamin Franklin’s phrase, “In this world, nothing is certain except death and taxes.”
“Taxation is a crucial source of financial power for governments to provide social services for their citizens.
“However, Nigeria’s tax administration system is due for reform, citing design and implementation flaws, as well as taxpayers’ attitudes,” the minister added.
“It is inspiring to see Nigerians from all walks of life coming out to express their views and opinions on these matters of critical national importance.
“President Tinubu has also been very clear that the Executive will listen to and work with all stakeholders to ensure that all concerns are duly and comprehensively addressed,” he added.
Idris acknowledged the importance of citizen engagement in the implementation of President Bola Tinubu’s fiscal reform agenda.
“As President Tinubu continues to implement an ambitious fiscal reform agenda that will devolve more resources to Nigeria’s State and Local Governments, and ultimately to the Nigerian people, in the spirit of true federalism, citizen engagement will become ever more critical,” Idris said.
…NIPR
Earlier, President NIPR Dr. Ike Neliaku, while throwing the support of the institute behind the tax reform bills currently before the National Assembly, said the institute was willing to partner with ministry to take the tax reform ‘gospel’ to the six geopolitical zones of the country.
He pledged the institute’s support for the expected reality and implementation of the tax reform.
Also the lead discussant, Professor Mustapha Bagudo Muhammad, gave a thorough insight into the numerous advantages of the reform, while all the panelists including Senator Shehu Sani, Professor Cosmos Eze and Professor Hauwa’u Evelyn Yusuf, gave their nod to the proposed tax reform.
…Sheu Sani, Gumi, Hayab explain
According to Sani, many lawmakers who are against the current tax reforms are ignorant of the provisions of the bills.
“The other day I saw a senator speaking about the bill on a national television. From what he said, it is clear that he is not conversant with the provisions of the bills.”
He said countries like Saudi Arabia and United Arab Emirates had started taking measures to address their post oil future, adding that the Tax Reform is one of the very important steps for Nigeria and Nigerian economic future.
Also speaking, popular Islamic cleric, Sheikh Ahmad Gumi, said Nigeria needed reforms in all its critical sectors.
“It is not only in tax that we need reforms. There is no sector of Nigeria that doesn’t need reform.
“But if we start with the tax are we not putting the cart before the horse. Because already there is a draft bill on regional government and if it works the whole tax thing will change depending on the region.”
On his part, former Chairman Christian Association of Nigeria (CAN) Kaduna state, Rev. Dr. John Joseph Hayab, said the tax reform was necessary, but called for more awareness creation and sensitisation.
He said the debate about tax reforms should not be centered around ethnic and religious lines.
He said: “You invited us for a constructive dialogue. I wished we had started this dialogue long ago before the bill for the tax reforms was sent to the National Assembly; probably we would not have been here now.
“For a Christian, tax payment is not new. The Bible encourages us to pay tax. In societies where people pay tax, the citizens are responsible; they question government and participate in the act of governance.
“But sadly in Nigeria, people see tax as something new. They see is as exploitation. Permit me to say that there is also the question of trust deficits. Even if our leaders bring milk for us to drink and get fat people will still ask whether the milk is not poisoned.
“If we handle the issue of trust deficit we will address most of the problems we are having today as a nation.”