NIGERIA: The League of Northern Democrats (LND) on Thursday listed conditions for supporting President Bola Ahmed Tinubu’s Tax Reform Bills currently under review in the National Assembly.
Senator Ibrahim Shekarau, chairman of LND and former governor of Kano State, on Thursday in Abuja during the presentation of a report by a technical committee set up by the group to assess the controversial Tax Reform Bills, emphasised the importance of addressing concerns raised by the technical committee set up to evaluate the bills, reports Daily Independent.
The committee’s findings highlight socio-cultural and governance issues that, if overlooked, could have severe consequences.
Shekarau underscored the LND’s stance on the reforms as a chance to foster economic stability while tackling broader national challenges.
“The LND views the proposed tax reform bills as an opportunity to advance Nigeria’s economic stability while addressing constitutional, socio-cultural, and governance concerns,” Shekarau stated.
“We urge comprehensive amendments to ensure inclusivity, national cohesion, and equitable resource distribution.”
LND also advised that the Tax Reform Bills should align with constitutional provisions, as well as respect the religious and cultural practices, particularly on inheritance taxation, adding that if properly implemented, the reforms have the potential to transform Nigeria’s economy, unlock opportunities for growth and development.
The league had two weeks ago, set up a technical committee to study the bill and to come out with a position to be advanced by the body.
Picking holes in the bills, the chairman of the committee, Senator Bala Na’Allah, explained that the Tax Administration Bill intends to provide for uniform procedures for a consistent and efficient administration of tax laws in the country in order to facilitate tax compliance and optimise tax revenue collection.
Kicking against some sections of the bills, Na’Allah pointed out that there is lack of clarity on Section 77.
He expressed concerns on the effectiveness and appropriateness of the corporate governance of state Inland Revenue Service as provided for by sections 82, 84, 87, and 90 of the Tax Administration Bill.
Section 77 of the Tax Administration Bill states that “Notwithstanding any formula that may be prescribed by any other law, the net revenue accruing by virtue of the operation of chapter six of the Nigeria Tax Act shall be distributed” based on 10 percent for the Federal Government; 55 percent to the state governments and the Federal Capital Territory; and 35 percent to the local governments.
He stated that the committee’s analysis of the October 2024 Federal Government allocation showed a disproportionate application of the existing formula for the derivation portion of value added tax (VAT) proceeds.
The committee chairman further disclosed that the distribution of the derivation allocation of October 2024 VAT collection to the 774 local governments in the country showed that all the states belonged to a cluster apart from two, Rivers and Lagos states.
He said: “This development is not unconnected with the interpretation of derivation by the tax authority. These two states host most of the head offices of companies that remit VAT centrally.”
Analysing the sharing of the allocations, Na’Allah said that the South West with 137 local government areas, Lagos State with only 20 local government areas collected 88.2 percent of the zonal total, while the remaining 11.8 percent was shared by the 117 local government areas in the other five states in the zone.
He said: “While in the South- South, Rivers State collected 82.1 percent and the remaining five states shared the balance of 17.9 percent of the allocation to the zone.
“Looking at the share of each zone …the South West received the most (this was the sum of N31.27 billion) while the South East zone received the least (this was the sum of N903.28 million).
“Indeed, the allocation to all the 95 local government areas in the South East was less the share of only one local government area in Lagos State that received N915.08 million.
“Of all the states, Imo received the least allocation of N20.57 million for all of its 27 local government areas.”
Also speaking, the former Minister of State for Finance, Dr. Yerima Ngama, said “if the government and successive ones will formulate similar policies that would double or even triple such huge corporations especially in agriculture, animal husbandry, mining, etc., we will build the economy, triple our VAT earnings and lessen the burden on the poor in the country.
“Very importantly also, Northern Nigeria will substantially increase its production capacity and reduce its endemic poverty.”
