Nigeria’s House of Reps suspends debate on tax reform due to Northern governors pressure
The House of Representatives in Nigeria has indefinitely suspended the debate on the Tax Reform Bills that were initially scheduled for discussion on December 3, 2024.
This decision comes in response to significant pressure from the governors of the 19 northern states, who have expressed strong opposition to the proposed bills.
The suspension was communicated through a memo signed by Dr. Yahaya Danzaria, the Clerk of the House, indicating that further consultations with relevant stakeholders are necessary before proceeding.
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The Tax Reform Bills include several key pieces of legislation aimed at overhauling Nigeria’s tax system. These bills were transmitted to the National Assembly by President Bola Tinubu following recommendations from a Presidential Committee on Fiscal and Tax Reforms led by Taiwo Oyedele.
Among these bills are Nigeria Tax Bill 2024 which aims to establish a comprehensive fiscal framework for taxation in Nigeria; Tax Administration Bill, which seeks to provide a clear legal framework for tax administration, aiming to reduce disputes related to taxation; Nigeria Revenue Service Establishment Bill which intends to repeal existing laws governing the Federal Inland Revenue Service and establish a new entity known as the Nigeria Revenue Service; and Joint Revenue Board Establishment Bill which proposes the creation of a tax tribunal and an ombudsman for tax-related issues.
These reforms are seen as critical for improving revenue generation in Nigeria, which has faced significant economic challenges.
Opposition from Northern governors
The opposition from northern governors is rooted in concerns that these reforms may disproportionately affect their regions. During a recent meeting, they directed their federal lawmakers to vote against these bills when they come up for debate in both chambers of the National Assembly.
Their primary concern revolves around how changes in tax policy, particularly regarding Value Added Tax (VAT) distribution, could negatively impact their states’ revenues.
A leaked video from a closed-door session revealed intense discussions among lawmakers from northern states expressing fears that these reforms would hinder development in their regions. Lawmakers highlighted that before insurgency issues exacerbated poverty levels in areas like North-East Nigeria, their region was already struggling economically.
Concerns over legislative process
Several lawmakers voiced concerns about the speed at which these bills are being processed through legislative channels.
Borno State governor Babagana Zulum criticized this haste, comparing it unfavorably to other legislative processes that took years to finalize, such as the Petroleum Industry Bill. He emphasized that careful consideration is necessary so future generations can benefit from any reforms enacted today.
The Northern Governors Forum has also raised alarms about potential negative impacts on their states if these bills pass without adequate consultation and adjustments based on regional needs and perspectives.
