NORTHERN SENATORS DEMAND SUSPENSION OF ACTION ON TAX REFORM BILLS

NORTHERN SENATORS DEMAND SUSPENSION OF ACTION ON TAX REFORM BILLS

Northern senators have called for the suspension of further legislative action on the controversial Tax Reform Bills, which recently passed second reading in the Senate.

The lawmakers made this demand during a meeting on Monday, citing potential adverse effects on northern states.

The House of Representatives had at the weekend announced that it has suspended debate on the bills due to public outcry and resistance from some northern lawmakers.

The proposed tax laws, submitted by President Bola Ahmed Tinubu to the parliament, have sparked heated debates nationwide.

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Critics, including northern governors, traditional rulers, and lawmakers, had urged the president to withdraw the bills for broader consultation. But the president insisted that the bills should be allowed to undergo legislative process.

Senator Buba Umaru Shehu, All Progressives Congress (APC) Bauchi State, who revealed the outcome of the northern senators’ meeting in an interview with the BBC Hausa Service yesterday, said northern senators from both the ruling APC and the opposition parties agreed on the need for the suspension of action on the proposals.

“These bills are complex and require thorough review by tax policy experts,” he said.

He criticised the perceived haste in advancing the bills, which were deliberated on for only a few days.

Senator Shehu said northern lawmakers strongly oppose the proposed “derivation” formula in the value added tax (VAT) distribution system, arguing that northern states would be unfairly impacted.

He warned that passing the bills without careful review could have long-term consequences.

Also confirming their decision to Daily Trust yesterday, Senator Ali Ndume (APC, Borno) said the northern senators met with their governors and other leaders where they agreed to advise for the withdrawal of the tax reform bills for further consultations and buy-in.

He said this was in line with the suggestions of traditional rulers and the National Economic Council (NEC), adding that state assemblies in the region would also voice out their objections soon.

He equally said some provisions in the bills clashed with the Nigerian constitution and would not stand.

“I am surprised that the motion which we agreed was not mentioned today (Tuesday) at the plenary, but I am hopeful that tomorrow (Wednesday), the Chief Whip of the Senate (Tahir Monguno) will bring a motion for the withdrawal of the bills as agreed in that meeting.

“This is not the first time such a thing has been done; some good examples include the water resource bill when our friends from the South raised concerns and it was withdrawn. We had the Petroleum Industry Bill (PIB), which was withdrawn on several occasions in the House of Representatives and the Senate before it was finally passed after more than ten years.

“As I said before and I will repeat it, why the hurry? This is something that should be done after wide consultation because it requires the buy-in of all stakeholders,” he said.

Ndume also dismissed the claim in some quarters that they were using the tax reform imbroglio to play politics ahead of 2027.

“No; somebody has to be principled. Politically, I am the second oldest legislator in the National Assembly. I am used to saying it as it is. I am not playing the script of anybody. If I have any political leader today, (former president, Muhammadu) Buhari is supposed to be number one and then President Tinubu. I cannot speak against them but I can disagree with them,” he said.

In the House of Representatives, where the deliberations on the proposed laws have been suspended, Rep. Muhammad Bello Shehu Fagge said “We’ve observed the public’s anger over the bill and the strong reactions from our religious leaders, which is why we decided to suspend the debate,” he said.

The controversial bills had been referred to the Senate Committee on Finance for further review. The committee, chaired by Senator Sani Musa (APC, Niger) is expected to subject them to a public hearing to get inputs from experts and members of the public.

Reps’ spokesman silenced over support for bills

The House of Representatives witnessed a rowdy session yesterday following a passing remark by its spokesperson, Akin Rotimi (Ekiti, APC) in support of the contentious tax reform bills.

Rotimi, while presenting a report on behalf of the House Committee on Nigerian Content Development and Monitoring, prefaced his remarks by saying, “I am from Ekiti State, the very first state in the NASS Caucus that has unanimously endorsed the tax reform bills.”

This comment drew immediate backlash from his colleagues, with many shouting “No, no!” to express their disapproval. The session became chaotic as lawmakers objected to Rotimi continuing with his presentation.

Speaker Abbas Tajudeen attempted to defuse the situation, calling the statement a “light note” and withdrawing it on Rotimi’s behalf. He urged lawmakers to focus on the proceedings and allow Rotimi to continue, but the uproar persisted.

The Speaker said: “Hon. Rotimi, you know this is a controversial issue. I wouldn’t want you to mention things that are not relevant to the subject matter. So, please, on your behalf, I withdraw that statement. Let us not repeat it again.”

Despite the intervention, the lawmakers’ opposition intensified, forcing Rotimi to step down from presenting the report.

To restore order, the Speaker called for the House to dissolve into the Committee of the Whole for report consideration.

The speaker then handed over proceedings to Deputy Speaker Benjamin Okezie Kalu to continue the session.

Tinubu directs justice ministry to work with NASS on bills

Meanwhile, the president has directed the ministry of justice and other relevant stakeholders to work with the National Assembly to address areas of concern on the bills.

In a statement yesterday, the Minister of Information and National Orientation, Mohammed Idris cautioned against name-calling and the injection of unnecessary ethnic and regional slurs during conversations on the tax reform bills.

He noted the robust nationwide debate on the bills and urged commentators to be respectful and understanding at all times despite the diversity of opinions.

The minister said there were a lot of misinformation and fake news circulating around the tax bills and the overall reform agenda of the Tinubu administration, assuring that the fiscal reforms would not impoverish any state or region of the country.

The minister added that President Tinubu had directed the Ministry of Justice and relevant officials who worked on the drafts to work closely with the National Assembly to ensure that all genuine concerns are addressed before the bills are passed.

He said: “It is pertinent to state that the government has nothing sinister to warrant the suggestion that the process is being rushed. In line with the established legislative procedure, the federal government welcomes meaningful inputs that can address whatever grey areas there may be in the bill.”

‘Bills will hamper oil and gas industry growth’

Meanwhile, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has also weighed in on the conversations about the bills, saying they could stifle exploration activities and adversely affect key regulatory bodies in the oil and gas sector.

Speaking during a National Executive Council (NEC) meeting of the body yesterday in Abuja, PENGASSAN President, Festus Osifo, highlighted potential negative impacts on the Nigeria Upstream Regulatory Commission (NUPRC) and the Nigeria Mid and Downstream Petroleum Regulatory Authority (NMDPRA) if the reforms are implemented in their current form.

Osifo urged the government to broaden the scope of tax relief exemptions, especially for minimum wage earners and businesses.

“The association notes the ongoing tax reforms and demands that tax relief exemptions for those earning minimum wage and businesses be expanded to include more individuals and companies,” Osifo stated.

Coalition of Northern Groups kicks too

Also speaking on the matter, northern groups under the Coalition of Northern Groups (CNG) yesterday kicked against the proposed tax reforms.

At a press conference held in Abuja, the National Coordinator of the group, Jamilu Charanchi, in an address on behalf of the group, highlighted series of economic challenges facing Nigerians currently.

Charanchi said the policy would entrench hardship among the “already poverty-stricken Nigerians through the deployment of some harsh neoliberal measures.”

He said after carefully reviewing the proposed tax reforms, the group noted that they would aggravate existing challenges in the country.

He said: “The CNG, like all Nigerians, is fully aware that citizens are facing socio-economic challenges, including poverty, unemployment, and underfunded education, poor health and dilapidated infrastructure. Others are; inflation, multiple taxation, corruption and impunity in government which stifle our development.

“The CNG, after carefully reviewing the proposed tax reforms, in their current form, believes that it would aggravate our existing challenges, perhaps with only three states and the FCT to benefit out of our collective difficulties. The proposed reforms in the bills, particularly the introduction of a 60% derivation formula for revenue collection, are deeply contentious. The lack of publicly available data to justify these changes raises serious concerns, especially for consumption-heavy states in the North. Taxation is inherently a number-driven issue, yet the government has failed to provide the necessary data to justify this shift. For instance, how was it determined that Lagos and other headquarters-hosting states are disproportionately contributing to national VAT revenue and receiving a more disproportionate share? Was it not determined using data? Then if the claims that other states apart from Lagos and its likes will be better off under the proposed formula are based on transparent data, why isn’t it publicly available?
“Proponents of the reform claim it will improve fairness, but without clear projections showing how much each state will collect and receive under the proposed system compared to the current arrangement. This remains an unsubstantiated assertion”, he said.