By Segun Otokiti, Abuja– Following unanimous passage of the Tax Reform Bills for second reading at the Senate on Thursday, the hitherto opposition senator to the bills, Ali Ndume (APC, Borno South) was forced to take a softer stance as he said he was not against tax reform but was concerned about timing of the bills and their constitutionality.
The bills, which were presented by Senate Leader Opeyemi Bamidele, were passed after a closed-door session that lasted over an hour.
The Senate on Thursday resumed its debate on the Tax Reform Bills, a set of four legislative proposals to increase value-added tax (VAT) distributable to the sub-national governments to 55% while reducing the federal government’s share to 10%.
The new legislative regimes also proposed zero VAT on exports and essential consumptions by the masses and grant of input VAT credit on assets and services in addition to goods consumed by businesses to lower the cost of production.
While claiming that his problem was about timing and the issue of derivation, the former Chief Whip of the Senate, Ndume, insisted that the Constitution of the Federal Republic of Nigeria, 1999 (as amended) must be amended before the Tax Reform Bills should take effect, therefore calling for its immediate withdrawal.
“I am not against the reform, my problem is that timing and the issue of derivation makes the reform contagious. The 1999 Constitution has to be amended before the bills can be effective,” Ndume stated.
Despite claiming he’s not against tax reform, Ndume still rejected the bill, citing insufficient consultations, issues with the Value Added Tax (VAT), and derivation.
He said, “There is the issue of derivation because the Constitution has to be amended for some of the proposals of the Bill to be affected. This bill should be withdrawn. We work on it and submit it back after getting the buy-in of the Governors, National Executive Council and the Traditional Rulers.”
However, the Chief Whip of the Senate, Senator Mohammed Munguno (Borno North) expressed strong objection to Ndume’s submissions, asking the Senate to disregard it and pass the bills for second reading.
Munguno urged the Senate to pass the bill into second reading, advocating that all areas of concern would be addressed at the public hearing stage.
After the debate that featured Chairman, Senate Committee on Finance, Senator Sani Musa and Chairman, Senate Committee on Ecology, Senator Seriake Dickson, the Senate unanimously passed the bills into second reading following Munguno’s final position.
Meanwhile, the Senate has directed its Finance Committee to hold a public hearing on the proposed bill, opening the floor for stakeholders, including the Governors’ Forum, National Economic Council (NEC), Northern Elders’ Forum (NEF), and other opposing groups, to share their thoughts and concerns. The Finance Committee has been tasked with reporting back to the Senate within six weeks.
The Federal Executive Council had proposed the Tax Reform Bills comprising the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024 and Nigeria Tax Bill, 2024.
The bills elicited spirited interests among key lawmakers and stakeholders across party lines, a situation that informed the leadership of the Senate to invite Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele and Chairman, Federal Inland Revenue Service, Dr. Zacch Adedeji to brief its plenary.
