Secretary to the Government of the Federation (SGF) George Akume has addressed concerns surrounding the country’s proposed Tax reforms, particularly fears of regional opposition. Akume reassured the public that extensive consultations with prominent northern figures, including religious leaders and senior citizens, demonstrate significant support for the bills. He dismissed claims that the reforms target any particular region or are designed to disadvantage the North. The tax reform bills, comprising the Joint Revenue Board of Nigeria (Establishment) Bill, 2024, the Nigeria Tax Bill, 2024, and the Nigeria Revenue Service (Establishment) Bill, 2024 aim to restructure and modernise the country’s tax system.
These bills continue to raise public debate, with some interpreting them as politically motivated while others view them as necessary steps toward equitable revenue distribution and economic growth. The proposed reforms include several provisions designed to benefit economically disadvantaged Nigerians while stimulating growth. Key features include exemptions from personal Income Tax for individuals earning below ₦800,000 annually and a tax break for small businesses generating less than ₦550 million in annual revenue. Additionally, essential sectors such as healthcare and Education are exempt from certain taxes.
Northern senators have yet to unite behind the development.
Another notable reform is the restructuring of Value-added Tax (VAT) revenue distribution. The new structure allocates 55% of VAT revenue to states, 35% to local governments, and 10% to the federal government, a significant shift from the previous arrangement, where the federal government retained 15%. Akume noted that the North, with its higher number of states and local governments, stands to benefit from the increased allocations. Despite Akume’s assurances, northern senators are yet to unite behind the amendment, citing concerns about their timing and certain provisions.
Some legislators argue that the bills may exacerbate economic challenges and create unnecessary political tensions. A group of senators has opted to withhold their position until a meeting with the Attorney-General of the Federation (AGF), Lateef Fagbemi, to address the controversial aspects of the bills. The delayed meeting with the AGF has added to the uncertainty. It was postponed due to the AGF’s absence from the country and the lack of an official Senate invitation. Lawmakers emphasise that refining the bills to eliminate inconsistencies and align them with constitutional requirements is essential for securing broad support.
Ndume speaks on the timing and the existing budgetary inefficiencies.
Among the most vocal critics is Senator Ali Ndume of Borno South, who has advocated for withdrawing the bills to allow for more extensive consultations. Ndume questioned the timing of the restructuring, arguing that the country should focus on reducing recurrent expenditure, which consumes over 50% of the national budget, rather than introducing new bill measures. Ndume also expressed concerns about the bills’ distraction, urging the government to prioritise addressing existing budgetary inefficiencies. He emphasised the importance of widespread public engagement to ensure that any bill restructure aligns with democratic principles and public interest.
Meanwhile, the division among northern senators underscores the complexity of the debate. While some lawmakers have openly criticised the bills, others remain noncommittal, awaiting the outcome of consultations with the AGF. Akume has urged transparency among legislators, calling on those who support the reforms to declare their stance publicly. This, he argued, would foster informed discourse and help build consensus. The SGF also reminded stakeholders that the legislative process includes opportunities for public hearings, allowing citizens to voice their concerns. He urged critics to participate constructively rather than resorting to protests, emphasising that the reforms are designed to address national economic challenges.
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As directed by President Bola Tinubu, the Ministry of Justice is working with federal lawmakers to harmonise the bills to serve the nation’s interests. The Senate has constituted a special committee to refine the proposals, but their final position will depend on the outcome of consultations with the AGF. Lawmakers have assured the public that they will not pass laws that could exacerbate economic hardships. Instead, they aim to address the unclear provisions in the bills to ensure they are both effective and equitable.