Former Governor of Kano State, and Chairman of the League of Northern Democrats ( LND), Senator Ibrahim Shekarau, has said that significant concerns over the tax reform bills before the National Assembly must not be ignored.
Shekarau expressed this view at the presentation of the LND Technical Committee report on the tax reform bills transmitted to the National Assembly, recently, by President Bola Tinubu.
The bills, which seek to reform tax administration in the country, have been trailed by controversy, with Governors and some Northern leaders kicking against them.
A fortnight ago, the LND set up a technical committee to review the bills and come up with a position to guide the group on the proposed legislations.
“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.
“These reforms, if properly implemented, have the potential to transform Nigeria’s economy, unlocking opportunities for growth and development. However, while tax reform is undoubtedly overdue, the bills have raised significant concerns, which must not be ignored,” the former Governor said.
Chairman of the LND Technical Committee, Senator Bala Ibn. Na’Allah, while presenting the report, which was adopted by the group as its position on the tax bills, identified contentious clauses and recommended expulsion/amendments.
According to him, “The League expects to see Tax Reform as a component of a wider economic reform efforts necessary to broaden the narrow indirect tax bases, improve on the low tax collection efficiency, walk back on excessive tax exemptions (i.e. 4% of GDP lost in 2021), improve on tax compliance and public morale, amongst others.
Na’Allah stated that “Section 4 (3) and 4 (4) be expunged from the Nigeria Tax Bill as it infringes on the rights to religious and certain cultural practices across the country with respect to inheritance.
“Section 59: This Section provides for the sunset dates for TETFund, NITDA, NASENI, and transfer of consolidated development levy of 2% to the NELFund subsequently. ”
He stated that the League analysed the October 2024 allocation and is dismayed by the disproportionate application of the existing formula for the derivation portion of VAT proceeds.
According to him, “Figure 1 shows the share of each state in the total allocation and share of each state within the zonal total.
“All the states belonged to a cluster apart from two, Rivers and Lagos States. 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.
“Figures 2 – 7, compared states within the same zones in their share of October 2024 derivation shared to local governments. Figures 6 and 7 stand out because of the effect of Lagos State and Rivers State.
“In the Southwest with 137 local governments, the 20 local governments in Lagos State collected 88.2% of the zonal total, while the remaining 11.8% was shared by the 117 local governments in the other five states in the zone.
“While in the Southsouth, Rivers State collected 82.1% and the remaining five states shared the balance of 17.9% of the allocation to the zone.
“Looking at the share of each zone in Figure 8, the Southwest received the most (this was the sum of N31.27 billion) while the Southeast zone received the least (this was the sum of N903.28 million).
“Indeed, the allocation to all the 95 local governments in the Southeast was less than the share of only one local government 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 governments.”
