The Nigerian Senate has passed for second reading the highly debated four tax reform Bills, despite opposition from Senator Ali Ndume, who called for the proposed legislations to be withdrawn in line with requests from State Governors and the National Economic Council (NEC), for further consultations.
To avoid a repeat of the previous day’s controversy, the Senate first deliberated on the matter in a closed-door session.
When the doors reopened, Senate Leader, Opeyemi Bamidele led the debate on the four Bills.
The Bills includes; the Joint Revenue Board of Nigeria (Establishment) Bill, The Nigeria Revenue Service (Establishment) Bill,the Nigeria Tax Administration Bill and the Tax Reform Bill.
The Senate leader had described the proposed tax reform laws as a crucial step in overhauling Nigeria’s tax system.
According to Bamidele, the proposed Bills aim to standardize tax administration, eliminate multiple taxes, and reduce the tax burden on low-income earners.
Senator Ali Ndume, speaking after Bamidele’s presentation, raised concerns about the timing of the Bills, pointing out that they come at a time when citizens are already facing economic hardship.
He also criticized the proposed “derivation” clause in the VAT sharing arrangement, arguing that it was flawed and contradictory, requiring constitutional amendments for some proposals to take effect.
Ndume further emphasized the importance of aligning with the resolution of the National Economic Council and State Governors, who have called for the Bills to be withdrawn for more consultations with key stakeholders, including traditional rulers.
He urged the Senate to consult with these groups before making a final decisions on the Bills.
While acknowledging that the tax reform may seem attractive, Ndume warned that shifting the tax burden from low-income citizens to wealthier ones could lead manufacturers and the rich to pass on the VAT costs to consumers.
His suggestion was ultimately rejected as the Senate moved forward with the second reading of the Bills.
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Senator Seriake Dickson, while supporting the Bills, called for a comprehensive tax reform, noting that Nigeria lacks a strong tax base, which makes it difficult to track economic activities.
He pointed out that Nigeria’s tax-to-GDP ratio is among the lowest in the world, reflecting stagnation rather than progress.
Dickson stressed that the country’s early economy, based on taxation, had allowed for better planning before oil revenues took precedence, neglecting agriculture and manufacturing.
While welcoming the current administration’s push for tax-driven governance, Dickson raised concerns about insufficient consultation before introducing the tax Bills.
He also expressed support for the emphasis on derivation, which he believes will encourage States to be more productive by creating an environment that attracts investment and generates revenue.
Other Senators, including Sani Musa (APC Niger East), Abba Moro (PDP Benue South), and Senate Whip Tahir Monguno (APC Borno North), voiced their full support for the tax reform Bills.
The plenary, presided over by President of the Senate, Godswill Akpabio, passed the four tax reform Bills for second reading through a voice vote.
The Senate also mandated its Finance Committee to invite the Governors’ Forum and other relevant stakeholders to a Public Hearing, where the contentious issues raised by Senator Ndume can be further addressed.
The Committee is expected to report back to the Senate at plenary within six weeks.
(Editor: Ken Eseni)
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