The ongoing debate over Nigeria’s tax reform has taken a new turn following a bold declaration from Nasarawa State Governor, Abdullahi Sule. In a recent live broadcast on Channels TV, Sule confirmed that President Bola Tinubu has granted state governors the authority to amend the controversial tax reform bills, paving the way for a crucial shift in the country’s tax policy.
According to Governor Sule, President Tinubu acknowledged the concerns raised by governors during a meeting, offering them the flexibility to modify the bills without forcing a full withdrawal from the legislative process. The bills in question, which include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, have been at the center of heated discussions due to their potential impact on Nigeria’s fiscal landscape.
Northern Governors Express Concerns
The proposed tax reforms have sparked significant opposition, especially among northern governors, who have voiced concerns over several provisions of the bills. One major point of contention has been the structure of the Value Added Tax (VAT), which has been seen by many as disproportionately affecting certain states. Additionally, the bill’s recommendation to phase out the Tertiary Education Trust Fund (TETFUND) has raised alarms in northern states, where education funding is a critical issue.
Governor Sule expressed gratitude to President Tinubu for his willingness to listen and engage with governors. He said, “Congratulations to Nigerians because at the end of the day, we have achieved something through consultations. First, congratulations to Mr. President for guiding us through the process.” He explained that President Tinubu’s decision to allow amendments was a clear indication of his commitment to a fair and balanced approach to tax reform.
The VAT Debate: A Key Issue
At the heart of the debate lies the issue of VAT. According to Sule, the president recognized the importance of addressing the governors’ concerns over the potential economic impact of VAT reforms on their states. “You remember the contagious issue that we have as far as the bills are concerned is one: the VAT,” he said, highlighting the disagreements between the federal government and the states.
The northern governors have been particularly vocal about the VAT component of the reform. Many argue that the proposed VAT increases could place an unfair burden on states that are less economically vibrant, such as those in the northern region, which rely heavily on federal allocations. The fear is that an increase in VAT could worsen the already delicate economic situation in these states.
A Commitment to Consultation and Negotiation
In addition to Governor Sule’s statements, the Special Adviser to President Tinubu on Policy Communications, Daniel Bwala, has also weighed in on the matter. Bwala, a key figure in the ongoing negotiations, expressed confidence that a consensus could be reached through continued dialogue. “The tax reform bills have come for good and it will be passed. And I know the politics of the north and of course, you know I am a northerner,” he remarked.
Bwala emphasized that the political landscape in Nigeria, especially in the northern region, is characterized by strategic negotiation. Drawing a comparison with the U.S. political system, where laws are often passed through bipartisan negotiations, Bwala stated, “Just like in America, when you bring partisan laws, you will see that it passes without stress. When you bring a law that maybe Democrats will benefit more than Republicans, you will see that the Republicans will try to pose a threat so to speak until there is a concession.”
With ongoing consultations and the president’s willingness to listen, Bwala believes a middle ground can be reached that benefits all parties. “So with the continuous conversations in this field, I see a situation where there will be a position by the governors that may be acceptable to the federal government,” he said. “The federal government may need to concede in some areas while the state government may also need to concede in some areas and at the end of the day, the bill will be passed.”
State Governors Demand Flexibility
The latest development comes after months of protests and objections from state governors who argued that the tax reforms, as initially proposed, were too focused on federal control, without giving adequate consideration to state-specific challenges. Governor Sule confirmed that President Tinubu had listened to their concerns, offering a more flexible approach to the reform process.
“This is a victory for the Nigerian people, particularly in the north,” Sule continued. “We understand that the aim of the reforms is to modernize Nigeria’s tax system, increase the tax-to-GDP ratio, and ensure better compliance, but we also need a system that works for all Nigerians, regardless of region.”
Tinubu’s Vision for Tax Reforms
President Tinubu’s administration has made it clear that tax reform is a top priority. The aim is to overhaul Nigeria’s outdated tax system, which has long been criticized for its inefficiency and failure to generate sufficient revenue to support the country’s growing needs. By modernizing the tax structure, the government hopes to create a more business-friendly environment and boost the country’s economic growth.
Despite the ongoing opposition, the president has remained firm in his resolve to push the tax reform agenda forward. His strategy has been one of engagement, allowing for dialogue and adjustments where necessary, but always with the goal of passing the bills in their final form.
The Road Ahead
As the tax reform debate continues, all eyes will be on the National Assembly, where the bills are currently under review. The next phase of the reform process will likely involve further negotiations, with governors pushing for more modifications and federal authorities working to balance these requests with the broader objectives of the reform.
Governor Sule’s remarks indicate a shift in the dynamics of the debate, with greater collaboration between the federal government and state governors. Whether this will lead to a successful resolution remains to be seen, but one thing is clear: the consultations have given state governors a stronger voice in shaping the future of Nigeria’s tax system.
The tax reform process is far from over, but with President Tinubu’s backing, state governors have gained a critical foothold in the debate. As the negotiations progress, the hope is that a tax system will emerge that serves the needs of all Nigerians, fostering economic growth and ensuring that every state can thrive in the changing fiscal landscape.
