Northern Senators Divided Over Controversial Tax Reform Bills

The proposed tax reform bills before the National Assembly have triggered significant discord among northern lawmakers.

Initially met with strong opposition, a growing number of northern senators are now endorsing the legislation, highlighting a shifting dynamic in the debate.

Overview of the Bills

The reforms, encapsulated in the Joint Revenue Board of Nigeria (Establishment) Bill, 2024, the Nigeria Revenue Service (Establishment) Bill, 2024, and the Nigeria Tax Bill, 2024, aim to overhaul Nigeria’s tax system.

Introduced by President Bola Tinubu on October 3, the bills propose new structures and strategies for tax collection and revenue sharing across the country.

Opposition and Concerns

1. Economic Impact on Northern Nigeria:
   Northern governors and lawmakers initially opposed the bills, arguing they could undermine the region’s predominantly informal economy, which heavily relies on agriculture.
   1. Borno State Governor Babagana Zulum warned that the reforms could “crumble the north’s economy.”
   1. Senators like Shehu Buba (APC, Bauchi South) and Ali Ndume (APC, Borno) echoed similar concerns, advocating for broader consultations.
2. Calls for Withdrawal:
   The National Economic Council, chaired by Vice President Kashim Shettima, sought a pause to facilitate further stakeholder engagement. However, during plenary on Thursday, Senate President Godswill Akpabio clarified that the bills had neither been withdrawn nor postponed.

Emerging Support

Despite initial resistance, some northern senators are now backing the legislation. A senator, speaking anonymously, revealed that the opposition within the region is dwindling, with fewer than ten lawmakers actively calling for the withdrawal of the bills.

Key Issues for Northern Lawmakers

Supporters of the bills, even among northern lawmakers, have expressed concerns over the Value Added Tax (VAT) sharing formula, suggesting it may disproportionately disadvantage the region due to its informal economy.

Next Steps

The Senate Committee on Finance, under the direction of Deputy Senate President Jibrin Barau, is engaging the Attorney General of the Federation to resolve contentious issues. This dialogue is expected to shape the future of the bills as northern and national interests are reconciled.

The evolving debate underscores the complexity of implementing tax reforms in a diverse economy like Nigeria’s, with significant regional variations in economic structure and priorities.