In a dramatic shift, the House of Representatives has indefinitely suspended its debate on the controversial tax reform bills, following increasing pressure from northern governors and lawmakers. The bills, which include major changes to Nigeria’s tax structure, have sparked heated opposition from politicians in the northern region, leading to the postponement of the debate originally scheduled for December 3, 2024.
A memo from the Clerk of the House, Dr. Yahaya Danzaria, announced the postponement due to the need for further consultations with relevant stakeholders. The memo read: “The special session, initially scheduled for Tuesday, December 3, 2024, to discuss all the tax reform bills, has been postponed to a later date. This rescheduling is due to the need for broader consultations with all relevant stakeholders.”
At the heart of the opposition is the Northern Governors Forum, which has been vocal in its disapproval of the bills, especially the Value Added Tax (VAT) sharing formula. The 19 northern state governors, led by Borno State Governor Babagana Zulum, argue that the bills would disproportionately benefit the southern states, particularly Lagos, while leaving northern states at a disadvantage.
Governor Zulum recently expressed his concerns in an interview, questioning the rush to pass the bills. “Why the rush?” Zulum asked. “The Petroleum Industry Bill took almost 20 years before it was passed, but this tax reform bill is receiving attention within a week. It should be treated with caution for the benefit of future generations.”
The criticism from northern leaders, including influential figures like former Governor of Sokoto State, Senator Aminu Tambuwal, and 24 federal lawmakers from Kano State, has added to the growing pressure. They argue that the timing of the bills is wrong, given the current economic hardships faced by Nigerians, including the removal of fuel subsidies and the devaluation of the naira.
The controversy has sparked tense debates in the House, with some lawmakers accusing the leadership of pushing the bills too quickly. One lawmaker from the North-East stated, “The bills are against the interest of the North, and we believe more time is needed for proper consultations.”
In contrast, lawmakers from the ruling All Progressives Congress (APC) have been lobbying for the passage of the bills, arguing that they are necessary for fiscal reform and the overall growth of the economy. APC lawmakers like Philip Agbese and Babajimi Benson have been actively rallying support for the bills in the Green Chamber, citing their potential to relieve the tax burden on small businesses and poor citizens.
The bills, which were transmitted to the National Assembly by President Bola Tinubu in September 2024, include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. These proposed reforms aim to streamline the tax system, reduce disputes, and create a tax tribunal and ombudsman.
Despite the support from the APC, critics continue to argue that the proposed tax reforms will exacerbate regional inequalities. The Coalition of Northern Groups, for example, expressed concern that the new VAT sharing model could widen the economic divide between the North and South.
Meanwhile, the pan-Yoruba group, Afenifere, has come out in support of the reforms, claiming that the bills could stimulate the economy and improve infrastructure and social services across the country. Similarly, the Middle Belt Forum has called for a careful review of the bills to ensure fairness and equity in the revenue-sharing formula.
As the debate continues, it is clear that the outcome of these bills will have significant implications for Nigeria’s fiscal policy and the balance of power between the country’s regions. The suspension of the debate has given lawmakers more time to consult with their constituents, but whether this will lead to a compromise remains to be seen.
