Sen Orji Kalu, Others Disagree with the FG on Tax Reform Bills

The President Tinubu administration has been advised to follow the due process and not rush the passage of the Tax Reform Bills into law. Senator Orji Uzor Kalu and other discussants who spoke on Thisday Live, an Arise TV talkshow, yesterday berated the Federal Government for not consulting adequately before presenting the proposal to the national assembly. The panelists wondered why, for instance, neither the Council of State nor the Nigerian Governors Forum was consulted, seeing as the reform has implications for constitutional review. READ ALSO: Tinubu Rejects NEC’s Advice, Won’t Withdraw Tax Reform Bills The programme which was anchored by Dr. Reuben Abati also featured Barr Jide Ologun and human rights activist, Opeyemi Adamoleku, Executive Director, Enough is Enough. Senator Kalu said the “Federal Government erred by not seeking the buy-in of the Council of State, the Governors Forum and the public before coming up with the bill.” He remarked that the Presidency even had to break ranks when it disagreed openly with the National Economic Council (NEC) that is chaired by the Vice President, Senator Kashim Shettima, when the body called for caution. He explained that it is for that it was for those reasons that he supports the position canvassed by Senator Ali Ndume and some other northern Senators who called for more time for consultations and consensus building. Senator Kalu commended the stance of senator Ndume because, as he argued, “that’s what democracy is all about.” Sen. Kalu was however, optimistic that all the grey areas of the Bills will be cleaned up during the public hearing, even as Dr. Abati wondered if there would be a “proper public hearing that can pass the integrity test.” LONG READ: VAT, Vassal States and Restructuring (2) Regarding the accusation by some analysts that President Tinubu has a “Lagosnisation Agenda.” By which they imply that the Bills and other policies of the government are geared towards empowering Lagos, the home state of the President, Senator Kalu replied: “The bill is very progressive and brings back Fiscal Federalism. There will be no kangaroo public hearing. Any part of the bill that conflicts with our constitution will not fly.” According to him, “Tinubu needs to work on the integration of the country.” In her reaction, Ms. Adamolekun said, regardless of the nobility or otherwise of the proposed tax laws, since it relates to constitutional amendment, it should have been passed through the Council of States and subjected to a thorough engagement with the people. She added that not doing so gave rise to the present emotive outbursts on the matter. READ ALSO: Tinubu’s Tax Reform Bills: The Beginning of Fiscal Federalism? On his part, Barr Jide Ologun said he aligns with the northern senators and governors that aspects of the laws have the potency to pauperise the people, if implemented as proposed, even though it is an aspect of fiscal federalism. He argues that “our ultimate consideration should be the national interest.” He contends however, that the speed at which the Bills are being processed is a bit too much. He admonished that the government should “consider the interest of the nation before you do this, because the country is in dire need.” PLEASE READ ALSO: Only Lagos Will Benefit From Tinubu’s Tax Reform Bills, says Zulum

Tinubu’s Tax Reform Bills: The Beginning of Fiscal Federalism?

Not a few notable figures from the northern part of the country have expressed vehement opposition to the four tax reform bills proposed by President Bola Tinubu. Apart from the resistance to the piece of legislation by senators Abdul Nigi and Ali Ndume from Bauchi and Borno States, respectively, the greatest salvo yet, was delivered by Governor Babagana Zulum of Borno state who has raised alarms about the potential consequences of the proposed tax reform bills.  Governor Zulum warned that the legislation, advancing rapidly through the National Assembly, could severely harm the economic prospects of the North and other regions of Nigeria. He compared the swift legislative action on the tax bills to the prolonged process of the Petroleum Industry Bill, which took nearly two decades to pass.  He cautioned that the bills, if enacted, could hinder development efforts, including the ability to pay salaries in Northern states. The governor argued that the tax reforms would disproportionately affect certain regions, particularly in the North, as well as parts of the South West and South East. He expressed concern that the bills were being pushed through with little regard for their long-term effects on the country’s future. Zulum’s opposition may have been informed by the general intent of the bills which represents a significant shift in the manner of the distribution of VAT revenue. The new laws tend to mark the beginning of the much clamoured call for fiscal federalism as it provides for the allocation of VAT revenues based on the states where goods and services are consumed rather than pooling them centrally for redistribution as done for proceeds from the sale of oil and other national assets. Mr. Zacch Adedeji, the Federal Inland Revenue Service (FIRS) Chairman argued at a forum that the proposed sharing arrangement aligns VAT with its nature as a consumption tax. On the contrary, the north being largely agrarian, produces most cereals and other produce for the food and industrial raw materials needs of the country. Yet they do not benefit from VAT, even though the finished products are taxed. It is this mismatch or anomaly that may have been inflaming passions. Governor Zulum, however, emphasized that his opposition to the bills did not equate to opposition to the current administration but rather a plea for reconsideration.  He also stated that some individuals may be misleading President Bola Tinubu into thinking the North does not support his government.