Reps pass tax reform bills for second reading

The House of Representatives has passed for a second reading the four tax reform bills proposed by President Bola Tinubu, after a long debate on the floor of the House.

The four tax reform bills – the Joint Revenue Board of Nigeria (Establishment) Bill 2024, the Nigeria Revenue Service (Establishment) Bill 2024, the Nigeria Tax Administration Bill 2024, and the Nigeria Tax Bill 2024 – are collectively aimed at overhauling the Nigerian tax system.

They were transmitted to the National Assembly by President Bola Tinubu last year.

Leading the debate on Wednesday, the Majority Leader, Julius Ihonvbere, addressed many of the concerns raised about the bills, adding that the issues had been resolved through the Nigerian Governors’ Forum (NGF).

Mr Ihonvbere stated that the House had held several meetings with different caucuses to address their concerns. He also highlighted some of the benefits of the bills, including tax exemptions for low-income earners.

After a debate lasting over four hours, the bill was subsequently passed for a second reading when it was put to a vote by Speaker Abbas Tajudeen.

The bills were later referred to the House Committee on Finance for further legislative action.

Tax Bills

The tax reform bills, drafted by the Presidential Committee on Tax Reforms and Fiscal Policy, aim to overhaul the existing tax laws in Nigeria.

However, the bills have faced stiff opposition, mainly from the northern parts of the country, particularly from northern governors who have described them as “anti-North.”

The debates on the bills have escalated into a North vs.South issue, particularly over the VAT sharing formula.

The National Economic Council (NEC), a body composed of governors and chaired by Vice President Kashim Shettima, urged the president to withdraw the bills for further consultations. However, the president refused, stating that all concerns should be addressed in the National Assembly.

Governor Babagana Zulum of Borno State recently claimed that the reform would only benefit Lagos State – the president’s home state.

However, the NGF has supported the bills on the condition that certain changes be adopted.

The Debate

The mood of the House on Wednesday was completely different from when the bills were listed for debate a few weeks ago. According to most of the members who spoke on the bills, the intervention of the governors and the diplomacy of Speaker Tajudeen helped to soften opposition to the proposals.

Despite this change in stance, the North vs South divide remained evident. Many southern lawmakers spoke in support of the bills, while northern lawmakers still expressed reservations about certain clauses.

George Ozodinobi, the deputy minority whip and leader of the Labour Party (LP) caucus, praised President Bola Tinubu for introducing the bills, stating that they aligned with Peter Obi’s “consumption to production” mantra.

He described the bills as a “subtle restructuring of the country.”

Several other southern lawmakers shared a similar position, arguing that any imperfections in the bills could be addressed at the committee stage.

However, lawmakers from the North were highly critical of certain provisions, particularly those relating to inheritance. They contended that inheritance is a matter of faith and insisted that they would not compromise on it.

Although most lawmakers agreed that the bills should proceed to the second reading, it was with the understanding that the contentious issues would be addressed at the committee stage.