Tax reforms bills won’t impoverish North, presidency insists

The Presidency on Monday said the tax bills before the National Assembly will not enrich Lagos or Rivers states at the expense of northern states.

It also insisted that changing the funding source of agencies such as the Tertiary Education Trust Fund and the National Agency for Science and Technology Infrastructure does not mean scrapping them.

Special Adviser to the President on Information and Strategy, Mr Bayo Onanuga, argued this in a statement he signed Monday titled ‘No part of tax reform bills recommends scrapping TETFUND, NASENI and NITDA. No provision will impoverish the North.’

Onanuga stated, “The tax reform bills will not make Lagos or Rivers more affluent and other parts of the country, as recklessly canvassed, poorer.

“The bills will not destroy the economy of any section of the country.

“Instead, they aim to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.”

Onanuga warned that although President Bola Tinubu welcomes the public discourse emanating from these bills, arguments must be based on facts so as not to mislead the public.

“Contrary to the lies being peddled, the bills do not suggest that NASENI, TETFUND, and NITDA will cease to exist in 2029 after the passage of the bills,” he added.

Following approval of the Federal Executive Council in October, Tinubu transmitted four tax reform bills to the National Assembly for consideration.

The Federal Government says the bills are aimed at overhauling the nation’s tax system.

They include the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.

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The proposed legislation seeks to consolidate existing tax laws, establish clearer frameworks for tax administration, and create bodies like the Tax Appeal Tribunal and the Office of the Tax Ombudsman.

However, they have sparked significant controversy.

Critics argue that the reforms could disrupt the balance of fiscal federalism, potentially centralising tax authority and diminishing state revenues.

Notably, at a meeting on October 28, 2024, governors of the 19 Northern States, under the platform of the Northern Governors’ Forum, rejected the new derivation-based model for Value-Added Tax distribution in the tax reform bills.

They argued that the changes might adversely affect their regions’ financial autonomy.

Three days later, the National Economic Council comprising all 36 state governors asked the President to withdraw the Tax Reforms Bill from the National Assembly for more comprehensive consultations.

However, the President said there would be no need to withdraw the tax reforms bill from the National Assembly.

He insisted that, while the legislative process takes its course, inputs and changes can be made without withdrawing the bill from the NASS.