Admin
Tax Reform Bills: CSOs Kick As FG Blames Opposition On Ignorance
Civil Society Organisations (CSOs) in Nigeria have criticised the federal government for labelling some citizens’ opposition to the four tax reform bills as ignorance.
The director general of the National Orientation Agency (NOA), Lanre Onilu, said that various quarters in the country are resisting the tax bill because they lack proper awareness regarding the benefits of the proposed tax reforms.
Speaking on Wednesday at the Federal Secretariat, Bauchi, during a press briefing with journalists on the potential benefits of the tax reform bills submitted by the presidency to the National Assembly for consideration, Mr Onilu insisted that the reforms offer many advantages, particularly for the poor. He added that those opposing them are political figures who stand to pay more taxes under the new regime.
The NOA Director General, represented by the National Director of Planning, Research, and Strategy, Nuru Kobi, said the agency is committed to promoting awareness of ethical values and national development.
He added that, in addition to tax reform, the agency is initiating sensitisation campaigns in other areas, including HIV prevention, security awareness, human rights, and discouraging “get-rich-quick” schemes.
Mr Onilu argued that critical stakeholders, including the media, must be involved in shaping positive public perspectives on these key issues. He revealed that the tax reform bill would soon be made available in local languages to enhance understanding.
For her part, Bauchi State director of the agency, Mrs Theresa Omaga, stated that officials intend to lead efforts in every community within Bauchi State’s 20 local government areas.
According to her, amplifying these efforts to ensure the message resonates with every Nigerian is paramount.
However, civil society organisations have criticised the government for chiding citizens on an issue the government has failed to provide adequate public education.
The CSOs that spoke to LEADERSHIP include the Transition Monitoring Group (TMG), Transparency International (TI), and the Civil Society Legislative Advocacy Centre (CISLAC).
“It is not wise to attack Nigerians. The government should engage in sensitisation. If the bills benefit Nigerians, they will accept them with adequate sensitisation. Bullying will not solve the problem. If the bills benefit Nigerians, the government should sensitise the people and dialogue with them,” the CSOs said while urging members of the National Assembly to be patriotic.
LEADERSHIP reports that the CSOs have advocated for fiscal policy reforms that address Nigeria’s socio-economic challenges while promoting transparency and inclusiveness. They described the Nigeria Tax Bill 2024 as a landmark legislative initiative that could transform the country’s fiscal framework by consolidating legal provisions, enhancing tax administration, and promoting economic transparency.
“However, we strongly urge the National Assembly and the Executive to critically examine and address key gaps in the bill to ensure its implementation fosters inclusivity, economic equity, and sustainable governance,” the CSOs said.
CISLAC executive director, Auwal Musa Rafsanjani, highlighted several critical concerns within the bill.
He said: “The proposed derivation model for VAT revenue distribution risks deepening economic disparities among states. Addressing such systemic inequities requires a constitutional review. To mitigate these challenges, we advocate establishing an Equalisation Fund to support less-developed states in building their human capital and institutional capacity until 2030. Additionally, VAT must be collected at the point of sale rather than remitted to corporate headquarters to enhance transparency and prevent regional disparities in revenue allocation.
“The proposed increase in VAT rates, which are set to double by 2030, raises significant concerns about its impact on inflation and poverty. We recommend maintaining the current VAT rate of 7.5% until the economy stabilises, coupled with measures to shield vulnerable populations from price shocks. It is also imperative that the list of VAT exemptions be expanded to include essential items such as cooking energy (LPG and kerosene) and electricity for consumer use, to mitigate the regressive effects of taxation on low-income households.”
“To ensure tax incentives are administered equitably, we emphasise the need for transparency in their implementation. Strengthening the enabling laws of the Nigerian Investment Promotion Commission (NIPC) is critical to preventing misuse and ensuring inclusivity. Furthermore, the bill’s provisions for an effective tax rate on multinationals and high-turnover companies must be backed by clear and enforceable guidelines. Strengthening compliance mechanisms will ensure that large corporations and multinational enterprises contribute their fair share to national revenue.”
“Revenue from the Development Levy must be transparently utilised to enhance education and institutional capacity in underserved regions, supporting long-term human capital development,” Rafsanjani stressed.
The CSOs underscored that fiscal policies should bridge socio-economic divides while fostering trust between the government and citizens.
He further urged the National Assembly to engage with stakeholders, including civil society organisations, to ensure the bill reflects the aspirations and needs of all Nigerians.
Senate Suspends Legislation
Meanwhile, the Senate has directed its Committee on Finance to halt further deliberations on the proposed tax bill until the outcome of a high-level meeting with the Attorney General of the Federation (AGF).
The announcement was made on Wednesday during the plenary session presided over by Deputy Senate President Barau Jibrin, who revealed that a special committee had been formed to address the bill’s contentious provisions.
The meeting with the AGF to resolve the issues is scheduled for today, Thursday, December 5.
This decision follows intense discussions among lawmakers to resolve disagreements on key aspects of the proposed legislation. The contentious provisions have sparked debates among stakeholders over the past few days.
The Senate leadership also announced plans for a special meeting at the National Assembly, to be chaired by the Minority Leader.
The session aims to provide a platform for lawmakers to harmonise their positions and ensure that the bill aligns with national priorities while addressing concerns raised by stakeholders.
The special committee tasked with resolving the issues has the following members: Senators Abba Moro (chairman), Tahir Monguno, Adamu Aliero, Orji Uzor Kalu, Seriake Dickson, Titus Zam, Yahaya Abdullahi, Solomon Adeola, Sani Musa, and Mukhail Abiru.
The committee and Senate leadership are expected to lead efforts to ensure a balanced and inclusive approach to the proposed tax legislation.
[Leadership]
How Tax Reform Bills Put Barau On The Spot
For northern politicians, accusations of acting against “northern interest” can be politically perilous. This is the charge the Deputy President of the Senate, Senator Barau Jibrin, has been battling since the controversy over the tax reform bills caused an uproar in the Senate.
Last Tuesday, Senator Barau, presiding over the Senate plenary in the absence of Senate President Godswill Akpabio, faced one of the most challenging moments of his political career. He clashed with Senator Ali Ndume (APC, Borno) during debates on the bills and permitted the presidential committee on tax reform to address the senators—a decision that has since sparked a storm of criticism.
The backlash, particularly on social media, has been intense. Critics accused the Kano North senator of betraying northern interests by allegedly supporting the controversial bills. He was also the focus of Friday sermons in some mosques, with a cleric in a widely shared video calling for divine judgement against him and other supporters of the bills.
A satirical video by social media influencer Dan Bello further inflamed tensions, portraying Barau as complicit in advancing policies that would impoverish northern citizens. Originally posted on TikTok, the video amassed over 100,000 likes, 2,000 comments, and 10,000 shares. It also gained traction on X (formerly Twitter) and WhatsApp, where users widely shared it to accuse Barau of supporting the bills to curry favour with the presidency.
While some analysts argued that Barau may be a victim of circumstance, others added that the widespread distrust of the Nigerian government and his party, the All Progressives Congress (APC), has made him an easy target. Many critics contended that Barau should have found a way of excusing himself from presiding over the plenary last Tuesday or should have opposed the bills outright, including denying the presidential committee a platform to address lawmakers. Others, however, argued that as the presiding officer, Barau’s duty was to the Senate’s procedures, not regional sentiments.
Speculation about Barau’s political ambitions has also fuelled the controversy. Though he has not declared an intention to run for Kano State governor in 2027, some observers believe the incident has been politicised by rivals within the APC and the New Nigeria People’s Party (NNPP). These opponents are alleged to have amplified the narrative that Barau supports the bills, branding him as working against northern interests.
An X user, @Mk__maitama, highlighted this political dimension, accusing members of the NNPP’s Kwankwasiyya Movement—who have been among Barau’s harshest critics—of hypocrisy. He noted their silence when Hon. Abdulmumin Jibrin Kofa (NNPP, Kiru/Bebeji) openly championed the tax reform bills and granted interviews supporting them.
Some commentators also linked the relocation of Barau’s son’s wedding fatiha to Maryam Nasir Ado Bayero from Kano to Abuja to the public outrage.
However, the family of Alhaji Nasir Ado Bayero dismissed these claims, explaining that the change was to accommodate dignitaries from across Nigeria and abroad. In a statement, Alhaji Aminu Babba Dan Agundi, chairman of the organising committee, clarified that the relocation was a decision by the bride’s family and unrelated to the controversy.
Amid the uproar, prominent lawyer and social commentator, Bulama Bukarti, called for a fair assessment of Barau’s actions. “We need to be fair to him. Honestly, he hasn’t stated his position on this bill, whether in favour of or against it. People should calm down; the second reading is not the end of a law,” Bukarti said.
Barau also defended himself in an interview with the BBC Hausa, stating, “Nobody will come and do something that will cheat his people; nobody will do that.”
He explained that he allowed the presidential committee to address the Senate because further clarification on the bills was deemed necessary, as had been done in the House of Representatives.
“They [the committee] were invited, but some senators claimed they weren’t informed despite announcements on our platform. Nevertheless, the law allows us to proceed,” Barau said.
Addressing the social media backlash, he remarked, “Some people are already on standby to insult and defame others. They do this without understanding proper procedures. We politicise everything.”
In a show of support, a coalition of youth groups from northern states held a solidarity rally at the National Assembly on Tuesday, hailing Barau as the “Sardauna of our era.” A former president of the National Association of Nigerian Students (NANS), Comrade Tijjani Kabiru Mohammed, reiterated that Barau had neither endorsed nor opposed the tax reform bills but instead advocated for public sensitisation.
Observers believed the rally demonstrated that while some clerics and youths have criticised Barau, others stand firmly with him. They also opined that the protest underscored the political undertones of the development.
They suggested that this support might explain why Barau presided over Wednesday’s plenary, where the Senate announced the decision to step down legislative action on the bills.
[DailyTrust]
[OPINION] Lessons from Prime Minister Modi’s visit - Jide Oluwajuyitan
Indian Prime Minister, Shri Narendra Modi‘s state visit to Nigeria from 17-18 November 17 – 18 to “strengthen the current India-Nigeria Strategic Partnership” was but a renewal of over six decades of bilateral relationship between India and Nigeria dating back to 1958 – two years before Nigeria secured her independence from Britain. While the two leaders spoke of the immense potential for collaboration in the fields of trade, investment, education, energy, health, culture, Prime Minister Modi also offered India’s experience in agriculture, transportation, affordable medicine, renewable energy, and digital transformation to Nigeria.
Nigeria has always benefitted from her close relationship with India. For instance, besides the support of India teachers and doctors which Nigeria enjoyed immediately after independence, it is on record that it was India that established the National Defence Academy in Kaduna and the Naval War College, Port Harcourt. Today there are about 60,000-strong Indian expatriate community in Nigeria and over 200 Indian companies with investment portfolio of over $27 billion.
As post-colonial nation-states created by Britain to satisfy her greed for continued exploitation of resources of conquered and colonized territories, India and Nigeria share some parallels. Both are heterogeneous and multicultural societies where groups at different levels of cultural development were forcibly merged together without consultation. While Nigeria with a population of over 200m has about 350 ethnic groups, India with a population of about 1.4 billion has over 2000 ethnic groups. Sowing the seeds of future instability by Britain was not by accident. British officials, after all, had earlier boasted that it was their presence alone that had prevented the newly created states of Africa and Asia ‘from disastrous descent into turmoil of warring sects’. Institutionalising a federal arrangement for strange bed-fellows as a strategy for exploiting ethnic consciousness of federating ethnic nationalities was not out of place.
India is ethnically diverse with significant diversity within regions; almost every state and several districts have its own distinct mixture of ethnicities, traditions, and culture. But India, unlike Nigeria has been able to manage her diversity because India’s political elite saw their pluralism as strength and accepted the challenge of living together. They saw nothing wrong with tribes and made conscious effort to create states on basis of languages spoken by citizens such as Maharashtra, Punjab and West Bengal.
The federal system of India provides equality to all the citizens as well as freedom of expression and freedom to practice their religion, etc. In terms of financial relations, India follows a system of fiscal federalism, where financial resources are distributed between the central and state governments. The constitution provides for the sharing of taxes and grants-in-aid to ensure financial autonomy for the states.
Like India, our own 1957 constitution also laid down the framework for a federal system of government clearly defining the powers and responsibilities of the central and regional governments. The regional list includes subjects of local or regional importance, such as police, public health, and agriculture. The concurrent list includes subjects on which both the central and state governments can legislate. Fiscal federalism ensures or guarantees financial autonomy of federating regions.
Sadly, unlike India’s elite, our deceitful political elite undermined our own federal arrangement by unconstitutionally interfering in the affairs of the regions, and assaulting the tribes, the building block for African societies, claiming, albeit falsely, that it is possible to love Nigeria more than your family or your tribe which will be like climbing the palm tree from the top.
Despite the provision of the 1957 constitution, the feudal lords in the north did not allow freedom of religion. The 1963 republican constitution, the first to be wholly midwifed by Nigerian elite provided the coalition partners an opportunity to insert a clause that would allow them to arrest and detain people without court order for expressing their opinion. The first victim was Obafemi Awolowo who was detained for criticizing Anglo-Nigerian defence pact.
However, while India was busy setting up technology special schools (India Institute of Technology (IITS), the India Institute of Science (IISc) and National Institute of Technology (NITS) that attracted the best brains among India’s youths which has today resulted in Indian engineers heading most of the leading tech companies in the world, we were busy replicating federal government unity schools across Nigeria.
India started the arduous task by first taming the feudal lords, who had to be replaced by the capitalist class who know how to mobilise the people to secure power. India did this without underestimating the intrigues of the metropolitan powers. As President Bola Tinubu moves from France to Britain and to Germany, he must not forget the duplicitous role of Britain as foremost promoter of ethnic consciousness, secret supporter of Fulani claim of ownership of Nigeria, and betrayer of Biafra that had expected her support as chief promoter of ethnic consciousness.
India therefore emerged as a union of nationalist groups that respect the culture and values of federating members. Apart from Hindi, the official language spoken by about 40 percent, there are about 20 other recognized languages. They understand their challenges include taming the feudal lords who have to be replaced by the capitalist class. They did not underestimate the intrigues of the metropolitan powers in the guise of promoting ethnic consciousness. Or preventing the disintegration of areas amalgamated without consideration for their level of cultural development and favoured one group above the other.
Patriotism for Indians is not about loving India. That comes naturally from the union of nationalities. They don’t have to set up unity schools, institutionalize quota system of admission to tertiary institutions or into bureaucracy, discriminatory admission marks for JAMB or decree a National Youth Service in pursuit of elusive unity.
Instead, they set up competitive tech schools that attract the best of their youths. The result today is that most of the best tech companies in the world are headed by Indians. Indian leaders don’t need to decree patriotism. The billions of dollars repatriated back to India yearly by their tech experts in high demand in Europe and North America speak louder than the voices of those turned their brainwaves to state policies.
India’s visionary leaders didn’t have to mouth unity or patriotism. All they did was to invest in the education of their youths. The product of such schools are today in charge of India’s economy, ranked fifth in the world by GDP and in fact projected to become the third largest economy by the end of the decade.
We institutionalized quota system of admission into the unity schools to accommodate those who as a result of lower scores could not compete with their counterparts. In the name of unity, we set up JAMB to accommodate those who have no business in the universities, and quota system of recruiting third class graduates at the expense of first class graduates into the bureaucracy.
We don’t need to search far as to why India has become choice destination for Nigeria’s medical tourism, why our best graduates are moving in droves to seek greener pastures in Europe, Canada and USA and why India’s elite has been able to stabilize their democracy, their economy, sent satellite to the moon and became a nuclear power while our own elite remain the scourge of our nation.
South Africa targets Nigerian Lithium for e-vehicle revolution
- Foreign investments safe, says Tinubu
South Africa is exploring an investment opportunity in Nigeria’s solid minerals sector to boost industrialisation and transport system.
Highlighting the elements of the investment drive, President Cyril Ramaphosa said his country would collaborate with Nigeria to harness lithium to drive the green energy transition and electric vehicles (EV) batteries.
The South African leader, who expressed his country’s interest at the Nigeria -South Africa Business Roundtable in Cape Town, said Nigeria’s vast lithium reserves could serve as a cornerstone for industrialisation in the EV sector.
At the session, President Bola Ahmed Tinubu said Nigeria is a safe haven for investments, adding that there is a guarantee for ease of doing business under his administration.
Presidential Adviser on Information and Strategy Bayo Onanuga said in a statement that during the interaction, President Ramaphosa urged the private sector and development finance institutions to collaborate in building infrastructure and developing the manufacturing capabilities in this sector.
Emphasising the role of critical minerals in the global shift to a low-carbon economy, the South African leader called for collaboration in mineral processing and beneficiation at the source.
He said such partnerships would ensure that both nations maximise the value derived from their resources while bolstering their positions in the rapidly growing clean energy manufacturing sector.
President Ramaphosa alluded to the ‘South Africa’s Just Transition Framework and Investment Plan,’ which anticipates significant investments in renewable energy and the green economy over the next few years.
He said the approach aligned with global efforts to achieve sustainable development while reducing carbon emissions.
Ramaphosa also drew attention to the opportunities in pharmaceuticals, underscoring how the two countries are strategically positioned to benefit from burgeoning industries tied to clean energy and innovation.
He urged businesses from both nations to actively engage in initiatives that support green energy and sustainable industrialisation.
President Ramaphosa stressed:”There is also much opportunity for cooperation on pharmaceuticals. Our two countries are strategically positioned to benefit from the rapid growth of clean energy manufacturing industries.
“South Africa has developed a Just Transition Framework and an Investment Plan that anticipates massive investments in renewable energy and the green economy over the next few years.
“As part of the broader global transition to a low-carbon economy, we must leverage the abundant natural resources that exist in our countries to promote green industrialisation.
“We should leverage each other’s capabilities in minerals processing. We must work together to ensure critical minerals are beneficiated at source. We call on businesses to support and involve themselves in these initiatives.”
G20: South Africa to endorse Nigeria
The South African leader said his country will “keenly” support Nigeria, “a valued sister country”, to become a member of the G20 club of the world’s major economies.
He gave the promise at the official launch of South Africa’s presidency of the G20 in Cape Town, few minutes before he received President Tinubu at Tuynhuys to co-chair the 11th Bi-National Commission between Nigeria and South Africa,
South Africa and the African Union are the continent’s only representatives in the G20.
Ramaphosa said other key African countries should also be admitted to the club “so that we can raise the voice from Africa, the neglected continent for the longest time.”
He said South Africa had been the lone voice for Africa in the G20 before the admission of the African Union last year after his country had lobbied for it to become a member.
He said: “We have a voice, we have a presence, and we will be the biggest growth story in years to come.
“Our population is going to grow by leaps and bounds, and therefore, as a continent, we are going to be a big noise, and we want that big noise to be recognised in the form of countries that will be part of the G20 right now.”
Nigeria safe for investment, says Tinubu
President Tinubu said Nigeria is safe for investment, urging South African businessmen not to entertain any fear.
To boost mutual confidence, Nigeria and South Africa fully operationalised the Joint Ministerial Advisory Council on Industry, Trade, and Investment to enhance economic cooperation between the two leading African economies.
President Tinubu said Nigeria is open for business and ready to guarantee stability, security and the rule of law.
He promised to address the issues that discourage South African investors from growing their businesses and franchises in Nigeria, urging South Africa to reciprocate by allowing Nigerian companies to operate and flourish in the country.
President Tinubu said Nigerian officials would collaborate with their South African counterparts to facilitate the implementation of the agreed mandates under the Bi-National Commission.
He said: “Nigeria and South Africa are co-joined twins tied by the hips not only for survival but for the prosperity of the people.”
President Tinubu also said Nigeria is undergoing very stringent positive economic reforms to serve Nigerians and bring prosperity to Africa.
He added: “The reforms have begun to see the light of the day. You have no better investment than in Nigeria. You cannot earn better on your investments elsewhere except in Nigeria.”
President Ramaphosa, who shed light on the Joint Ministerial Advisory Council on Trade, said it was launched during his state visit to Nigeria in 2021.
Its aim was to address trade and investment challenges, foster policy alignment, and create a conducive environment for business growth in both countries.
President Ramaphosa said: “Today, we agreed on the full operationalisation of the Council. This will support a conducive environment for improved trade and investment. Through the Council, we hope to ensure the efficient resolution of trade- and investment-related challenges.”
He acknowledged the strategic importance of both nations in their respective regions and the need to diversify trade relations to move beyond oil and gas dependency.
Ramaphosa added: “South Africa runs a large trade deficit with Nigeria, mainly due to oil and gas imports. We need to diversify our trade to ensure a mutually beneficial partnership.
“We are greatly encouraged by the presence of South African companies in Nigeria, just as we welcome Nigerian companies in South Africa.
“We do recognise that challenges still exist within our respective operating environments that limit the expansion of investment and sometimes impact on the operations of companies.”
Bitcoin soars past $100,000 amid Trump’s pro-crypto revolution
Bitcoin has shattered the $100,000 milestone, riding a wave of investor confidence sparked by U.S. president-elect Donald Trump’s pro-crypto pivot.
The world’s largest cryptocurrency surged as high as $103,800 on Thursday, marking a 50 per cent rise since Trump’s November election win.
The rally intensified after Trump nominated crypto advocate, Paul Atkins, to lead the Securities and Exchange Commission (SEC), signaling a shift toward a more favorable regulatory environment.
Atkins’ appointment, along with Trump’s pledge to make the U.S. “the bitcoin superpower of the world,” has electrified the market.
“Bitcoin reaching $100k is an incredible milestone for our movement,” said Kris Marszalek, CEO of Crypto.com. “We never doubted. We never wavered. And we will never stop building.”
Trump’s crypto-friendly administration has also tapped Howard Lutnick for the Commerce Department and Elon Musk to co-lead the “Department of Government Efficiency,” humorously dubbed “DOGE” after the popular cryptocurrency Dogecoin, which has soared 150 per cent since election day.
According to Financial Times on Thursday, this surge marks a stark contrast to the sector’s downturn two years ago, when the collapse of FTX and regulatory crackdowns sent Bitcoin plummeting to $16,000.
Now, institutional money is flowing in, with BlackRock’s Bitcoin ETF alone managing $45 billion in assets.
Cameron Winklevoss, co-founder of Gemini, summed up the sentiment: “This bitcoin bull run is different. We have a pro-tech president-elect, a red Senate, a red House, and a mandate from the country to build.”
With $4.4 billion pouring into crypto ETFs since November, and companies like MicroStrategy planning to raise $42 billion for further Bitcoin investments, analysts predict a “golden era” for digital assets under the incoming administration.
Earlier in the first weeks of November, PUNCH Online reported Bitcoin smashed through the $80,000 milestone, reaching an all-time high of $81,858 amid post-election optimism in the US, as pro-crypto policies appear more likely under Trump.
Barely three days after, the world’s largest cryptocurrency reached a record high above $90,000.
Meanwhile, a check by PUNCH Online as at 5.33am on Coin Market Cap placed the coin at $102,724.32 with over 7 per cent increase in the last 24 hours.
Notably, Trump’s previous administration leaned heavily towards scepticism regarding digital currencies, but the president-elect has since embraced crypto, pledging to make the US the “crypto capital of the planet.”
CNBC noted that Trump had promised to retain “100 per cent of all the Bitcoin the US government currently holds or acquires in the future” and to dismiss SEC Chair Gary Gensler, whose tenure saw over 100 regulatory actions against crypto firms.
[Punch]
[OPINION] 10 ways the tax bills will make states richer - Tope Ajayi
Human beings naturally resist change. When comfortable where we are, we find it extremely difficult to embrace an uncharted path or seek greater glory. Those who are risk averse often don’t want to venture out to embrace unfamiliar territories no matter how tempting the possible reward may appear. We should not, however, be so imprisoned by the fear of the unknown not to explore new possibilities because we find our present circumstances satisfying enough.
Since the public debate around the Tax Reform Bills started, the strongest push back against it has come largely from the north. Borno State Governor, Professor Babagana Zulum has become the face of the resistance for the reasons he has pushed forward, even when some of them didn’t speak to the facts and provisions of the bills.
If Governor Zulum and other voices of resistance who think the states will be shortchanged had actually taken time to examine the four executive Bills, they will see how progressive and transformative the Bills are. They will also discern the thought behind them which is primarily to make both the Federal and sub-nationals fiscally stronger and buoyant.
In his public presentations and the most recent being the Channels TV Town Hall moderated by Seun Okinbaloye Monday evening, Chairman of Presidential Committee on Tax and Fiscal Policy Reforms, Taiwo Oyedele and other panelists again made convincing arguments for the passage of the Bills before the National Assembly.
Here are the 10 ways the Tax Bills will serve the states better and enhance their capacity to earn more revenue:
1. The federal government will cede 5% out of its current 15% share of VAT revenue to states.
2. The Bills will transfer income from the Electronic Money Transfer levy exclusively to states as part of stamp duties.
3. The Bills seek to repeal obsolete stamp duties law and re-enactment of a simplified law to enhance the revenue for states.
4. Under the new dispensation the Tax Bills will usher in, states will be entitled to the tax of Limited Liability Partnerships.
5. When passed by the National Assembly, the Tax Bills will enable the state government to enjoy tax exemption on their bonds to be at par with federal government bonds.
6. Under the proposed tax reform, states will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income.
7. Integrated tax administration will provide tax intelligence to states, strengthen capacity development and collaboration, and scope of Tax Appeal Tribunal to cover taxpayer disputes on state taxes.
8. The proposed tax laws grant powers for Accountant General of the Federation to deduct taxes unremitted by a government or MDA and pay to the beneficiary sub-national government on personal income tax of workers of federal institutions in states.
9. Framework to grant autonomy for states internal revenue service and enhanced Joint Revenue Board to promote collaborative fiscal federalism.
10. Legal framework for taxation of lottery and gaming and introduction of withholding tax for the benefit of states.
From the aforementioned, it is clear that the Tax Bills are not in any way injurious to the states. Apart from streamlining the tax system in Nigeria and catalysing economic output, the tax and fiscal policy reforms provide incentives for states to become economic powerhouses. The challenge for governors will be to put on their thinking cap by investing in manpower and critical social and physical infrastructure in their states that will support businesses and socio-economic activities to flourish.
Ajayi is the senior special assistant to the president on media and publicity
‘Blending is not a crime’ — Mele Kyari speaks on PH refinery operations
Mele Kyari, group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, says it is not a crime to blend petroleum products at the old Port Harcourt refinery.
Kyari, who spoke at the commissioning of the NUPENG Towers in Lagos on Wednesday, said the refinery is up and running, with loading operations in full swing.
On November 26, the refinery commenced crude oil processing after several years of being moribund.
The state-owned plant also commenced the loading of petroleum products for trucks.
The national oil firm disclosed that the refinery commenced production of daily outputs of straight-run petrol (naphtha), which is blended into 1.4 million litres of petrol.
Some Nigerians have questioned the ongoing blending at the refinery when the plant ought to be refining crude,
Speaking on the issue, Kyari said blending is not a crime as it is an integral part of the refining process.
“If you don’t blend, you will bring out off-spec products which will destroy your vehicles,” he said.
“Every refinery blends because what is on specification in the United States of America will be off-spec in Nigeria and elsewhere.
“Blending is necessary to bring products to the specification of different countries or regions.”
Kyari also invited those in doubt about the operationalisation of the refinery, including Femi Falana, human rights activist and lawyer, to join him on a tour of the Port Harcourt, Warri, and Kaduna refineries to verify their various statuses.
He congratulated NUPENG on the successful completion of the NUPENG Towers, urging the union to continue to prioritise dialogue and cooperation in its relationship with the NNPC and the federal government.
The GCEO said the president’s interventions in the oil and gas industry by way of executive orders are yielding positive results, with more investments coming in and prospects of more jobs in the industry.
[TheCable]
Oyedele: Derivation Formula’ll Reduce Inequitable Resource Distribution
•Says tax reform bills necessary to end struggles by Nigeria’s poorest
•Insists consultants won’t be involved in collection
•Senate suspends further action on public hearing, sets up ‘elders’ committee to douse tension
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, yesterday argued that derivation formula in the tax reform will reduce inequitable distribution of resources. He stated that some states pushing back on the proposed 60 per cent Value Added Tax (VAT) derivation formula may end up with 100 per cent if the courts eventually decide so.
The Senate proceeded to set up a 10-member committee of ‘elders’ led by Senate Minority Leader, Abba Moro to meet with Attorney General of the Federation’s team on areas of concerns in the bills to douse the lingering tension of the tax reform.
Speaking on Arise Television, Oyedele said that it was surprising that the same states for which the committee was fighting were the ones kicking against the passage of the tax reform bills.
The tax expert’s remarks came as the Senate yesterday directed its committee on Finance to stop further action on the landmark tax reform bills, pending when grey areas of concern raised on the proposed legislations by stakeholders are properly addressed.
But Oyedele explained that the current VAT allocation formula, based on 20 per cent derivation, 50 per cent equality of states, and 30 per cent population, was flawed.
He cited litigation initiated by Lagos and Rivers States, in which they argued that VAT collection should be under state control, since it is not explicitly mentioned in the constitution, arguing that if the case goes their way, it will mean that VAT will be based on 100 per cent derivation, further deepening the current inequity among states.
He defended the urgency of the tax reform bills, emphasising the need to address economic challenges, promote fairness, and ensure equity in revenue sharing, outlining how the reforms aim to resolve systemic issues in the VAT system and provide relief for struggling Nigerians.
He said: “Most likely, if we get the judgement from the Supreme Court, it will say states should administer it. When a state administers VAT, then it becomes 100 per cent derivation.
“It is important for us to understand that our proposal to move derivation to 60 per cent is actually a middle ground. If we lose the opportunity of getting this 60 per cent derivation, we are likely to end up with 100 per cent derivation, which, to be honest, is not bad but is going to create a lot of problems for businesses and economic growth.”
Asked why the federal government was in a rush to ensure that the bills were pushed for emergency passage, Oyedele maintained that the challenge of streamline Nigeria’s tax system was indeed an urgent matter.
“We are at a stage today where the majority of people are struggling. Small businesses face over 60 official levies and taxes, over 200 unofficial ones. If you want to provide relief for your people, you should do it in a hurry because it’s urgent; it’s an emergency,” he pointed out.
According to him, the current system which attributes VAT revenue to states where payments are made rather than where consumption occurs, disproportionately benefits Lagos State and to a lesser extent Rivers state.
In 2023 alone, Oyedele said that Lagos accounted for over 80 per cent of VAT revenue, despite its economy being about 30 per cent of the national total, urging those opposed to the current bills to imagine a situation where Lagos collects all its VAT.
“To promote equity and stimulate economic activities across the country, the reform proposes attributing VAT to where consumption takes place and increasing the share of VAT revenue states retain,” he stressed.
Oyedele, who also responded to insinuations that adequate consultation was not carried out by the committee, said that there were at least four meetings with finance commissioners as well as revenue service chairpersons, and with governors, to a lesser extent.
“We also had engagement with the governors themselves, but you would imagine that if you manage to get the airtime to speak to governors, either through the governors’ forum or the national economic council, they are unlikely to give you one hour or two hours, so there was a particular meeting where we got 15 minutes,” he disclosed .
He added: “We understand they have a very busy schedule. We also recognise that they may not be in the best place to deal with the technicalities of what we were dealing, that is why we spent more time with their finance commissioners and with the revenue service chairpersons across Nigeria.”
Stressing that Tinubu has never interfered in the work of the committee, he said that the body was able to convince the federal government to reduce its share of VAT from 15 per cent to 10 per cent, reallocating the remaining 5 per cent to states,.
“This amount exceeds what states currently collect from multiple consumption taxes and ensures efficient, centralised tax collection,” Oyedele argued.
He also dismissed allegations of third-party involvement in tax administration, especially consultants, noting that the bills explicitly prohibit the use of such consultants for tax collection or assessment.
Separately, Special Adviser to President Bola Tinubu on Policy Communication, Daniel Bwala, has said that the opposition from the north against the bill was just a mere plot for political negotiate
Speaking on Arise television programme, Prime Time, Bwala said: ”I have a feeling that this whole opposition thing, I see it even more of playing the politics for negotiation.”
Bwala, who hails from Borno, said contrary fears expressed in some quarters , the bills would not impoverish the north.
“I am from the north, and I am really saddened by the notion generated in the media that it is a north versus the south thing. This is not from the media in the sense of media people, but people creating the narrative that the tax reform bills are built or designed to afflict the north.
“I have seen lots of northerners who supported the bill, lots of them from different parts of the north, north-central and north-west. The very opposite is the point of the bill, because if you say that the bill is going to impoverish the north or is going to afflict poor people, it is actually this proposed bill that is addressing the problem that the poor people encounter.
“But the reason why I’m very emphatic about this issue of poverty is because I come from the north and the conversation in the north is that this will bring poverty to you, or this one will impoverish you. The tax is in favour of the poor,” he maintained.
Also yesterday, the Senate directed its committee on finance to stop further actions on the landmark tax reform bills pending when grey areas of concern raised on the proposed legislations are properly addressed.
The Deputy President of the Senate, Jibrin Barau, who stated this at plenary, specifically asked the Senate Committee on Finance, to put the proposed public hearing on hold for now.
He said a team of the Senate will today (Thursday), meet a delegation of the federal government led by the Attorney General of the Federation and Minister of Justice, Lateef Fagbemi (SAN).
Barau said: “It’s on this note that the Committee on Finance that the bills have been referred to, should put on hold further action on it, that is, public hearing and other issues until we resolve these issues.
“All sides will be given the opportunity and we shall resolve the issues before anything is allowed to go.”
Barau said the proposed meeting with the AGF was aimed at resolving the criticisms on the proposed tax reform bills currently before the two chambers of the National Assembly.
Barau said the meeting will be held at the National Assembly Complex, Abuja and that it was necessary for the lawmakers to have extensive interaction with the government officials before passing the tax reform bills.
He said the Senate Minority Leader, Abba Moro will lead the senators in the meeting. Other senators who will attend the meeting according to the Deputy Senate President are: the Senate Chief Whip, Tahir Monguno; Adamu Ailero, (PDP, Kebbi Central), and Seriake Dickson (PDP, Bayelsa West).
Others are: Titus Zam (Benue South), Abdullahi Yahaya (Kebbi), Adeola Olamilekan (APC, Ogun West), Sani Musa (APC, Niger East) and Adetokunbo Abiru (APC, Lagos East).
Barau said: “Of the tax reform bills that are before us, this is in consonance with the fact that we understand at all times that this Senate is the highest assembly in this country.
“The Senate is composed of men and women of wisdom, of pedigree that this country has entrusted to legislate for them for the peace and tranquility and the development of this country. The Senate of the Federal Republic, as known by everyone and indeed other Senates in the entire world, are known to be the stabilisers of every country.
“When there are difficulties and disagreements, the Senate of this country comes in with solutions through dialogue and consensus at all times to solve such problems, and the Senate of the Federal Republic of Nigeria has been doing that since 1999.
“Because of this, we decided to put politics, ethnicity, and regionalism aside to sit among ourselves and find the way forward with respect to the issues surrounding the tax reform bills.
“It is on this note that we extended our view to the executive arm of government and it was agreed that there should be a forum to sit down to look at the areas that are creating disagreements to resolve them so that the entire country will remain united – united in our effort to solve our problems.
“Before the introduction of these bills, we know we’ve been faced with several problems and insecurity that we’ve been trying to solve. The president has been trying, and we’re also working with him to solve issues about our economy, which is in line with global economic problems.
“We also agree that we shouldn’t allow anything else to aggravate our country’s problems. It is on this note that it has been agreed by the executive and also by us that there should be a forum that will sit with the Attorney General of the Federation (AGF) so that we can sit down and sort out all these problems in the interest of this nation,” he stated.
He therefore proposed that by tomorrow (Thursday) there will be a meeting with the committee to sit with the Attorney General of the Federation to look at the issues and resolve them.
President Bola Tinubu had on Tuesday directed the Ministry of Justice to work with the National Assembly to address some of the concerns generated by the Tax Reform Bill currently before the Legislature.
The Minister of Information and National Orientation, Mohammed Idris who disclosed this in statement he issued in Abuja, said the nationwide debate on the new tax reform bills was commendable.
Meanwhile, the Colleges of Education Academic Staff Union (COEASU) has warned of grave consequences for the Tertiary Education Trust Fund (TETFund), if the bills are passed and implemented
The teachers’ union said if the bill sails through in the National Assembly, the sources of funding for TETFund might become impeded, thereby stifling the tertiary education in the country.
In a statement issued in Abuja, COEASU President, Dr. Smart Olugbeko criticised aspects of the proposed tax administration reforms, which he said threaten to cut off TETFund’s critical funding sources.
He described the move as a “dangerous ambush” that could severely undermine the development of public tertiary institutions in Nigeria.
He argued: “Our Union, COEASU, has noted with serious concern the inimical effect of the proposed tax reforms of the federal government on tertiary education in Nigeria.
“The tax reform is nothing but a dangerous ambush aimed at destroying public tertiary institutions in Nigeria. We strongly reject the aspects of the proposed tax administration which aims to withdraw or impede on the source of fund to TETFund.
“Such injury, if allowed to stand, is bound to undermine the development of public tertiary education in Nigeria,” Olugbeko added.
Emphasising the pivotal role of TETFund, Olugbeko noted that the fund was a product of decades-long advocacy by academic unions, particularly the Academic Staff Union of Universities (ASUU), adding that before its establishment, Nigeria’s tertiary institutions were grappling with decayed infrastructure and inadequate funding.
“It is shocking to note that no Nigerian government in the last two decades or more has committed up to 9 per cent of the annual budget to education despite UNESCO’s recommendation of 26 per cent,” the statement added.
COEASU warned that withdrawing TETFund’s funding source could push public tertiary institutions into the stock market, transforming them into profit-driven ventures accessible only to the wealthy.
“Except for TETFund, which has become the spine and lifeblood of public tertiary education funding, Nigerian universities, polytechnics, and colleges of education would have gone comatose.
“TETFund has been playing an indispensable role in the development of tertiary institutions in Nigeria, providing funding for infrastructure, research, teaching, and staff development,” Olugbeko stated.
COEASU accused the political elite of attempting to dismantle public tertiary institutions in favour of private, profit-driven alternatives, as was done with public secondary schools.
“Rather than killing TETFund through the purported tax reform, the federal government should strengthen and expand its revenue accrual sources with a view to sustaining the fund’s commendable efforts in our institutions,” Olugbeko stressed.
[OPINION] Tinubu and the VAT Pandora Box - Olusegun Adeniyi
The controversy surrounding the proposed adjustment to the formula for sharing the states’ portion of the Value Added Tax (VAT), especially the derivation component, in the tax reform bills submitted to the National Assembly by President Bola Tinubu is yet to abate. What I find interesting is that many readers are asking for my take on the issue. When I respond with ‘Tinubu, Wike and the Politics of VAT’ published on this page on 16 September 2021, everyone to whom I have forwarded the column replied that it is worth publishing again because it addresses many of the issues that are currently in the public domain. As I wrote in the column almost two years before he became president, the VAT battle was ignited by Tinubu as Lagos State governor. But is he handling the issue well now that he is president of Nigeria?
Before I draw my conclusions on this vexatious issue, let me also state for the benefit of those who do not know me and may not be familiar with my writing that I am not the author of a piece being circulated on WhatsApp credited to one Olusegun S. Adeniyi. Aside the fact that Kwara State, from where I hail, is in the northern part of Nigeria, I don’t subscribe to unhelpful and divisive rhetoric. Now to the slightly abridged column of September 2021, before I conclude with my take on the current logjam.
===============================================================================================================
In September 2018, there was an interesting exchange in Premium Times between Vice President Yemi Osinbajo and his ‘illustrious predecessor’ (as he described him), Alhaji Atiku Abubakar. The issue in contention was restructuring of the country. The latter had taken on the former on his postulation that what Nigeria required was “managing resources properly and providing for the people properly.” To Atiku, Osinbajo failed “to appreciate the connection between Nigeria’s defective structure and its underperformance.” Defending his stance, Osinbajo argued that “good governance involves, inter alia, transparency and prudence in public finance,” before throwing this punchline: “Surprisingly, Alhaji Atiku leaves out the elephant in the room – corruption. And how grand corruption, fueled by a rentier economic structure benefits those who can use political positions or access to either loot the treasury or get favorable concessions to enrich themselves.”
I have spent considerable time in the past week investigating the VAT case under reference and my findings are quite revealing. In the statement of claim filed at the Supreme Court, the LASG under Tinubu had stated: “The House of Assembly of Lagos State of Nigeria is the body entitled, to the exclusion of any other legislative body, to enact laws with regard to the imposition and collection of tax on the supply of all goods and services within Lagos State of Nigeria and that Lagos State of Nigeria, or any agency of the State, is the body entitled, to the exclusion of any other body, to assess and collect such tax, and that the revenue of the Lagos State Government has been and continues to be affected by the enforcement of provisions of the Value Added Tax Act.”
Based on this claim, Lagos then urged the Supreme Court to determine “Whether upon the coming into effect of the Constitution of the Federal Republic of Nigeria, 1999, the said Value Added Tax Act is an existing law within the meaning of Section 315 of the said Constitution, being a federal legislation, which is deemed to be an Act of the National Assembly.”
Apparently mindful of the implications of the case against the background of some earlier rulings, the Supreme Court counselled Lagos to seek a political solution on the issue. That was understandable. A few years earlier, when the state challenged the powers of the federal government to grant licenses and permits to erect structures in Lagos without prior knowledge or consent, the Supreme Court ruled in favour of the state. The apex court held that any item “not expressly mentioned in the Exclusive Legislative List or Concurrent Legislative List is Residual and within the legislative competence of the state government.”
Knowing it had a solid case on VAT, Lagos refused to toe the suggested line of political solution. Eventually, the federal government filed a preliminary objection on technical point, asking the supreme court to strike out the case on grounds that there was no dispute between it and Lagos. The authority being challenged by Lagos, according to the federal government, was that of the Federal Inland Revenue Services (FIRS) hence the suit ought to have been filed at the Federal High Court (FHC). The federal government averred: “The Plaintiff’s cause of action relates to acts of a federal organ and cannot form the basis of invoking this Honourable Court’s Original Jurisdiction to entertain this suit; and the entire suit constitutes an abuse of court processes.”
In determining the case, the Supreme Court held that based on the affidavits filed, the grouse in question was about “…a dispute pertaining to the operation of an agency of the federal government.” With that, the Supreme Court concluded that it was the FHC “that was imbued with jurisdiction to the exclusion of any other court in civil causes and matters relating to the revenue of the government; connected with or pertaining to taxation of companies and other bodies; the operation and interpretation of the constitution in so far as it affected the federal government or any of its agencies.”
There were arguments at the time that the Supreme Court deliberately chose a clever route since Lagos was challenging the VAT Act enacted by the National Assembly and not FIRS as claimed by the federal government. But Lagos was left with the option to take the matter up at the FHC. Somewhere along the line, the state that had for 16 years been in opposition suddenly found itself in the ruling All Progressives Congress (APC) in 2015 and decided not to pursue the matter any further.
However, apparently taking a cue from Lagos, Rivers State under Governor Nyesom Wike filed a case against the FIRS at the FHC. And in his judgement, Justice Stephen Pam declared that FIRS “has no constitutional authority to enforce and administer taxes not expressly stipulated under Items 58 and 59, Part I, Second Schedule to the 1999 Constitution of the Federal Republic of Nigeria.” Following that decision, the Rivers State House of Assembly quickly enacted VAT Law No. 4 of 2021 to end the authority of the FIRS to administer, collect and enforce the VAT Act, 2007 in Rivers State. Lagos State that had pretended to be sleeping on the issue also jumped in with the accelerated passage of the VAT bill “in line with fiscal federalism that we have been talking about.”
I have always suspected that the VAT law would unravel one day. In a 2016 interview, former president of the Institute of Chartered Accountants of Nigeria (ICAN) and respected tax consultant, Mr Emmanuel Ijewere (he passed away last December), explained the mandate General Ibrahim Babangida gave the committee (which he chaired) that came up with the VAT law in 1993. “What was happening at that time was that there was a sales tax in several states, and there was no particular rule as to what they were charging. It was being used as a source of creating confusion, so the government now said let us standardize it.” Ijewere said his committee was told that “whatever money was collected in a state belongs to that state” while the VAT tax commission would retain 5% for administration. “Somewhere along the line, the federal government took it over, pushed the states aside, and that defeated the whole thing. It now turns out that the states that are generating a lot more VAT are not getting the commensurate amount of money from their economic activities and that was the unfair part of it.”
It is difficult to fault Wike’s argument that it makes no sense that Rivers State generated N15 billion VAT revenue in June this year but got N4.7 billion (about 30%) in return, while Kano generated N2.8 billion in the same month and got the same N2.8 billion back (100%). Meanwhile, Lagos State that generated N46.4 billion in the same month, was allocated N9.3 billion (about 20%). “Sometimes, you don’t want to believe these things exist,” Wike said. But while the Rivers Governor may have championed the recent fight, Tinubu was in the forefront before the APC came to the centre.
Meanwhile, the FHC judgement in favour of the Rivers State Government has thrown up issues about the nature of our system. If we were running a proper federation, the federal government would have jumped at it; being the biggest beneficiary if we disaggregate the VAT components. But many of the states would suffer and that is where the interest of the federal government comes in. With Wike talking tough against the background of the mismanagement of our diversity by the current administration, the VAT issue has provoked another North-South brouhaha. I want to deal with a few of them before I conclude.
Since everybody is talking about alcohol, including those who don’t drink, let us start from the VAT derived from it. In addressing the unholy wedlock between religious pulpit and political podium in Nigeria in my September 2019 column, I referenced the issue, following the destruction by the Kano State Hisbah Board of 196,400 bottles of beer in its effort to ensure a “sane, peaceful and sharia-compliant society.” I wrote: “this is the sort of hypocritical decisions that makes many to question the viability of our federal structure. The issue of VAT revenue is one of the strongest points being canvassed by proponents of restructuring the country. It is also one of the arguments made by Atiku before the last general election. ‘If a state is opposed to cattle tax or bicycle tax or alcohol tax, or pollution tax, for instance, it should not expect to share in the tax proceeds from those items,’ Atiku said in 2017.”
So, I align myself with those who say states that ban alcohol cannot benefit from VAT derived therefrom. But the notion of a ‘Parasitic North’ and ‘Productive South’ that forms the basis of most narratives when discussing the contradictions of Nigeria is not supported by any empirical evidence. While we cannot discount the argument of the Niger Delta whose people have for decades borne the brunt of oil exploration without much to show for the resource, the oil money for which some people deride others is rent rather than “any rigorous productive activity,” as Alhaji Bashir Ibrahim Yusuf reminded some of us in a chat group during the week. “The most hardworking Nigerians are the farmers who feed the nation with iron age tools without a fair reward for their labour.” And you find this class of Nigerians everywhere in the country.
As I have consistently argued on this page, the saber-rattling about North and South is a distraction from the real issue which is that Nigeria is not working for majority of its citizens. Now that the system is creaking beneath all of us, we must begin to fix it by bringing to the table the productive capacities of every citizen which means we need to wean ourselves of this distributive mentality that oil has foisted on our collective psyche. When the federal government argues for the retention of the status quo on VAT, it is to protect at least 30 of the 36 states which are both in the north and south. But it is also now clear that the market is over for these states that must begin to generate their own economic activities. The days of taking begging bowls to Abuja that is neck deep in foreign debts is gradually but surely coming to an end.
This VAT crisis therefore comes with a huge opportunity to address fundamental issues in an economy that is already in dire straits and perfect our skewed federal structure. As I argued in my ‘Platform Nigeria’ presentation with the theme, ‘Is Devolution of Powers the solution to Nigeria’s Problem?’ in May this year (2021), the fiscal imbalance in which the federal government controls disproportionate power and wealth has become a huge problem. The current regime of ‘sharing the national cake’ is also unsustainable. “We should actually be thinking in terms of getting the people to directly fund their government, not gathering to share oil money, and the laziness, lack of accountability and tension associated with it. We should be moving from an extract and share economy to one funded by taxpayers.”
In practical terms, there is value in a centrally collected tax and the current VAT regime has its own merit. We may need to change the name, increase derivation components, reduce the cost of collection by FIRS and allow states to retain 100% taxes on certain items (like alcohol) that some may have issues with. We may also need to tweak the sharing formula such that only a certain percentage will go to the central pool for sharing. But asking each state to keep all the VAT it generates will be difficult to implement under the current circumstance.
If, for instance, the court upholds the current ruling, each state will have to create its own VAT law to plug the hole that the centrally collected and distributed VAT will create in their already troubled finances. Different rates in different states will make it difficult to do business across the country. Things exempted from VAT could also be brought under such law (like food and agricultural products, for states that don’t have other things they can immediately tax.) The implication will be higher prices and inflation. Besides, since most states don’t have the capacity that FIRS has, they may deploy commissioned consultants and motor park touts to do the job of tax collection. We all know that would result in an open invitation to anarchy.
At the end of the day, we have two major problems. One, we have a revenue problem across the board. Without necessarily raising rates or creating new taxes, we need to bring more people into the tax net and be more efficient in collection. Two, we need to spend the accrued revenues more prudently. No point taking taxes from the people and expending such proceeds on frivolities or having some mummy and son fight over millions of Naira after daddy had ‘disappeared’ the dollar component into his Babariga!
ENDNOTE: From the foregoing, it is clear that I saw this problem coming more than three years ago. I also suggested the way forward. “From my reading of the whole situation and given the experience of Lagos on this issue, a political solution appears the surest bet to the VAT imbroglio,” I wrote at the time. “For that to happen, President Muhammadu Buhari must show leadership. He can delegate Vice President Yemi Osinbajo to use the instrumentality of the National Economic Council (NEC) which he chairs to negotiate with the states.”
Not surprisingly, Buhari did nothing. And in dealing with the issue, his successor has compounded the problem. Not only did President Tinubu discard the NEC recommendation to withdraw the bills before the National Assembly to pave the way for more comprehensive consultation with key stakeholders in the country, he also dismissively told the council, headed by Vice President Kashim Shettima and comprising all the 36 governors, to direct their reservations to the National Assembly. That statement was in bad taste.
Considering recent Supreme Court rulings which suggest a stance to uphold the federal nature of our constitution, presidential handlers may feel that the law is on their side on this matter. But that will be a myopic reading of the situation in a country like ours. The Waziri Adio-led Agora Policy, a think tank focused on development and governance, has done extensive work on the tax bills and their implications in practical terms. The main takeaway from their interventions is that there will be losers and winners on the VAT issue, and it will impact revenue in many states. You don’t handle a policy like that the way this administration has gone about it.
For instance, Agora Policy’s disaggregation of the ‘percentage gains and losses on actual and proposed VAT for states for October 2024’, indicates that no fewer than 14 states will suffer revenue deficit with ten of them from the North if the proposed VAT formula scales through with adjustment. But that does not even tell the whole story. Of the 22 states that will ‘gain’, only nine are from the North, and if you remove Kano (42.32%) and Kaduna (35.24%), the accruing benefits for the other northern states are marginal. In fact, my state (Kwara) would gain only 1.16%. Meanwhile, 13 of the 17 Southern states are projected to witness a massive revenue jump with an additional VAT revenue of 86.17% going to Delta, 62.43% to Ogun, 53.58% to Imo and 50.09% to Anambra. Such fundamental changes in fiscal outlook in each of the 36 states (for better or worse) cannot be treated in such a cavalier manner.
When the stakeholders (federal government, 36 states and 774 local governments) gather each month to share the proverbial ‘national cake’ at the meeting of the Federation Account Allocation Committee (FAAC), the main source used to be from Statutory Revenue: oil and gas plus solid minerals and all other taxes/levies from the Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS). Not anymore. On 24 November when they last met to share accrued revenues for the month of October, for instance, only N206.32 billion came from that source (after sundry deductions, which is another story by itself). Meanwhile, that N206.32 billion from Statutory Revenue is about 15 percent of the net sum shared, raising questions about the management of the Federation Account. In contrast, of the N1.411 trillion shared at FAAC for the month, the VAT component was N622.3 billion!
Like the two policies of the current administration on fuel subsidy and Naira exchange rate, the motivations behind them may have been good but their reckless implementation has negatively impacted the people, to put the situation mildly. The same could happen with the tax bills, which ordinarily are not a bad idea. Because most states rely on money shared at FAAC to fund their budgets, it is no surprise that we now have a political crisis that has divided the country along sectional lines. I continue to urge President Tinubu to dialogue with the governors on this issue. If he bullies his way to get the laws passed by the National Assembly without the buy-in of critical stakeholders across board, the consequences may be too difficult to manage in a fragile country like Nigeria.
[ PRESS RELEASE] Out-Going President Akufo-Addo Promises Peaceful, Credible Elections in Ghana
Ghana’s President Nana Akufo-Addo, who completes his mandatory two terms by 7 January 2025, has promised to leave office through peaceful and credible general elections on 7 December 2024.
“I came (to the office) as a result of a peaceful and credible election, and I want to go out through the same process,” to entrench the democratic tradition in Ghana, the Ghanaian leader told visiting ECOWAS Election Observation Mission led by former Nigerian Vice-President Mohammed Namadi Sambo during an audience at Jubilee House, Accra on Tuesday 3rd December.
President Akufo-Addo said that ECOWAS as a community has been facing “challenges and negative developments”, including violent extremism and military incursions in politics, especially the decision of three member States to quit the regional economic bloc.
“The responsibility is on us to respond to these challenges with the conduct of free, fair and credible elections,” he said, adding that the upcoming presidential and parliamentary elections in Ghana, a founding and active member of ECOWAS, would be of particular resonance.
He assured that Ghana has institutions with experience in conducting credible elections under its fourth Republic from 1992, noting that the country values the contributions of ECOWAS, chairing its Authority of Heads of State and Government in the past.
In his remarks, Dr Sambo commended Ghana’s democratic tradition, which included the unbroken ninth cycle of regular elections and peaceful transfer of political power.
He urged the president to galvanise the nation to pull together for peaceful, transparent and credible elections and the consolidation of democracy in Ghana and the region.
The ECOWAS delegation included the Deputy Head of Mission, Baboucarr Blaise Jagne, Gambia’s former Foreign Minister, Ambassador Abdel-Fatau Musah, ECOWAS Commissioner for Political Affairs, Peace and Security, who is leading an Electoral Technical Support Team and Ambassador Mohamed Lawan Gana, ECOWAS Resident Representative in Ghana.
Accompanying President Akufo-Addo at the meeting were Ghana’s Foreign Minister Shirley Botchwey, recently appointed Commonwealth Secretary-General, Interior Minister Henry Quartey, Kow Essuma, Secretary to the President and Michael Afori-Attah, Director Regional Integration, Office of the President.
At a separate meeting with Mrs Jean Mensa, Chairperson of Ghana’s Electoral Commission, Dr Sambo called on the electoral umpire and other stakeholders, including the security agencies, to demonstrate high-level professionalism and neutrality in carrying out their duties.
The EC Chairperson briefed the ECOWAS Mission on the activities of the Commission, saying preparations were on course for a peaceful and credible presidential and parliamentary elections on 7 December.