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Tax Reform Tussle: Senate Puts Debate On Hold, Awaits AGF Talks

The Senate has temporarily halted discussions on the controversial Tax Reform Bills, directing its Committee on Finance to pause public hearings pending resolutions to public concerns. This decision was announced during Wednesday’s plenary, presided over by Deputy Senate President Jibrin Barau.

A special committee has been set up to engage the executive arm and address contentious aspects of the reforms.

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EKO HOT BLOG reports that the Tax Reform Bills, including the Joint Revenue Board of Nigeria (Establishment) Bill and the Nigeria Tax Bill, have drawn sharp criticism, particularly from northern governors who described them as “anti-democratic.”

Oyo State Governor Seyi Makinde, representing the National Economic Council, advocated withdrawing the bills for further consultations to build consensus and understanding.

The reforms aim to streamline tax administration and introduce a 60% derivation formula for value-added tax (VAT) distribution. However, critics, including Borno State Governor Babagana Zulum, have raised concerns about perceived regional disadvantages and urged deeper consultations.

Governor Zulum warned that some clauses could adversely affect northern states, calling for revisions before the bills become law.

In response to the backlash, the Senate invited President Tinubu’s economic team, led by Taiwo Oyedele, to provide detailed clarifications. Oyedele defended the urgency of passing the reforms, citing widespread poverty, inflation, and excessive taxation hindering small businesses.

He emphasized the need for swift action, likening the urgency to the global response during the COVID-19 pandemic.

Tax Reform Senate AGF

Despite the push for expedited action, disagreements persist. Northern senators, led by Shehu Buba, opposed the proposed VAT derivation formula, claiming it disproportionately favors states like Lagos and Rivers.

To address these concerns, the Senate has initiated discussions with the Attorney-General of the Federation (AGF), Lateef Fagbemi, though his availability remains uncertain due to travel. Meanwhile, the Senate committee, chaired by Abba Moro, plans internal consultations to chart the way forward.

While Oyedele’s team underscores the bills’ potential to alleviate Nigeria’s economic challenges, the Senate aims to balance urgency with inclusivity to ensure equitable outcomes.