.No plan to scrap TETFUND, NASENI, NITDA–Presidency
.Review legislations before passage –Expert
Ignatius Okorocha, Abuja and Damisi Ojo, Akure
Despite mounting opposition from different quarters, Chairman, Senate Committee on Ecology and Climate Change, Seriake Dickson, has declared that the National Assembly would pass the tax reforms bills.
Senator Dickson, who represents Bayelsa West Senatorial District in the National Assembly, stated this on Monday during an interview with journalists in Abuja.
The former Governor of Bayelsa State declared that if the National Assembly could pass the Petroleum Industry Act (PIA), nothing would stop the nation’s Legislature, from doing the same thing with the tax bills.
He also allayed fears in some quarters that the planned public hearing on the matter could be chaotic if the event was not postponed for further consultations.
The politicians urged anyone or group of people who were opposed to the bill to attend the public hearing with facts if they had issues with any sections of the proposed fiscal legislations.
Dickson argued that if the National Assembly could pass the PIA containing 3% statutory fees payable to the Host communities despite the Niger Delta Leaders insistence on 10% recommended in the executive bill, that of the tax reform bills won’t be an exception.
The three per cent fee is Operating Expenses or Expenditure (OPEX) of the previous year being remitted to host communities by oil companies as stipulated in the PIA 2021.
The lawmaker said that the late President Umaru Musa Yar’adua, proposed 10% for the Host Communities but that the National Assembly passed three per cent after about two decades without any protest.
Dickson said, “The Senate has passed the bills for second reading. Public hearing will take place and people should get ready to present their positions.
“The tax bill is a law like every other law and it has to go through the normal legislative process. Right now, taxes from Bayelsa State are paid to Lagos State and i don’t want that to continue.
“When there is consumption of any good or services from any state it should be calculated and paid to that state. Now there is an opportunity to review the tax laws, to correct the anomalies and that’s why I’m in support.
“I know there are states that are feeling that when they apply the new sharing formula, they will earn less. It’s for them to raise those issues and bring the statistics. I don’t go by sentiments. I go by what is right and in the national interest.”
Asked whether there won’t be uproar during the public hearing if wider consultations were not carried out, Dickson said there would be nothing like that.
He said, “Forget about uproar, there will be no uproar. Public hearing is an opportunity for people to present their matters, and nobody is going to be intimidated by uproar.
“The PIA was passed. We wanted 10% which was what Yar’adua proposed. They (federal lawmakers) reduced it to 3%. Heaven did not fall. This tax reform bills will pass and heavens will not fall.”
No plan to scrap TETFUND, NASENI, NITDA
—Presidency
Meanwhile, the four Tax Reform Bills currently being considered by the National Assembly didn’t propose the scrapping of the Tertiary Education Trust Fund (TETFund), National Agency for Science and Engineering Infrastructure (NASENI) and National Information Technology Development Agency (NITDA) if passed into law.
Borno State governor, Professor Babagana Umara Zulum, while speaking on Channels TV’s programme, ‘Sunday Politics’, had claimed that the affected federal government agencies would be scrapped if the bills are passed into law by the Senate and the House of Representatives.
He added that neither himself nor any Northern governor was against President Bola Tinubu over the Executive Bills but were only craving for dialogue and adequate consultation on the proposed legislations in order not to be short-changed.
However, in a statement by the Special Adviser to the President (Information & Strategy), Mr. Bayo Onanuga, the presidency denied plans to scrap the agencies.
The statement read “Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.
“Unfortunately, most reactions are not grounded in facts, reality, or sufficient knowledge of the bills. While some commentators have attempted to incite the people against lawmakers, others have polarized one section of the country against another.
“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.
“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.
Government agencies, such as NASENI, TETFUND, and NITDA, are funded through budgetary provisions with company income tax and other taxes paid by the same businesses that are being overburdened with the special taxes.
“One reason President Bola Tinubu embarked on the Tax and Fiscal Policy Reforms is the need to streamline tax administration in Nigeria and make the operating environment conducive for businesses.
“For decades, businesses, investors, and private sector players in Nigeria have complained of being overburdened by a myriad of taxes and levies, including those earmarked to fund various government agencies and initiatives.
“The multiple taxes complicate the economic environment, making Nigeria uncompetitive for investment and preventing many businesses from growing or continuing their operations. Some companies have had to make the rational decision to relocate to other countries. We can not continue on this path or wait for 20 years if this country is to deliver the prosperity we need for our people.
“The proposal, as contained in section 59(3) of the Nigeria Tax Bill, only seeks to consolidate some of the earmarked taxes imposed on companies and replace them with a single tax to be shared with the key agencies as beneficiaries in a phased manner until 2030.
“The time frame offers ample opportunity for the affected agencies to explore other funding sources in addition to budgetary allocations in line with the constitution and international best practices.
“It is a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it. None of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.
“The government imposes major taxes, be it income tax, consumption tax, or other taxes, to channel resources to its areas of priority at the time. Imposing a separate tax to fund an agency is an aberration that has yet to yield results despite the huge burden on businesses. The tax bill seeks to address this problem.
“Relevant stakeholders and public analysts owe it a duty to properly educate themselves about the bills’ contents and avoid misleading the public for any reason. We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
“In a period like this, when our people across the country look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, leaders should be more measured in their public utterances to avoid heating the polity and polarising the country unduly.
“President Tinubu welcomes the public interest these bills have generated. He encourages leaders across the country, including Governors, Traditional rulers, Civil Society Activists, Students, trade associations, professional associations, and the general public, to take advantage of the Public Hearings that the National Assembly will organise to present their views on how best to reform our taxes and fiscal regime.
“What is never in doubt is the imperative of changing the existing tax laws and administration that have become obsolete and unhelpful in achieving the growth and development we desire for our country”.
Review legislations before passage —Expert
Similarly, a financial expert, Akin Omole has called for review of some sections in the Tax Reform Bills, now before the national assembly.
The legislature will work on the bills before being passed as law.
Omole noted that already a section of the bill, on the Value Added Tax, (VAT) is one sided as it does not favoured most states in the north.
This development had eventually caused the rejection by the Northern states.
In a statement in Akure, Ondo state capital, Omole pointed out that from the current 20 percent to 35 or 40 could be much better than the proposed 60 percent in the reform bill.
He said” it is logical to attribute resources to sources of economic activities using derivation as a key determinant in what accrues to each state of the federation, saying it is in the right direction.
Omole said “in my view, the oppositions raised by notable voices from Northern Nigeria on this issue are not entirely unfounded, just that they seem to be too heavy on politics and rhetorics than offering credible basis for their opposition.
“Take for instance, every part of Nigeria have their areas of comparative advantage in terms of economic activities and contributions to the national economy.
“The North is predominantly heavy in agriculture and food production which unfortunately, are largely exempted from VAT, for the general benefit of all Nigerians.
“Therefore, increasing derivation to 60 percent, when you have exempted majority of their economic activities, is clearly placing the North at an unfairly disadvantaged position which the good side of proper attribution would not be able to cure.”
Omole, emphasised that the section if passed into law will be unfair to the middle class.
“You cannot punish or penalize hard work and industry. Those who break into those realms in this difficult environment evidently put in extraordinary diligence, discipline and hard work and these shouldn’t be discouraged.
”In addition, maintaining the high net worth status would evidently require higher costs of living, which arguably sustains the level of income.
“For instance the neighborhood they live and their premium lifestyle are facilitators of the high income levels. Therefore, granting more less same reliefs across all income level is unfair and a disincentive.
The financial consultant said proportional consolidated reliefs should be maintained,while reliefs must be commensurate according to income bands.
