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Tax reform bills face Senate hurdle as south-east senators push for broader consultations

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The Tax Reform Bills under review by the National Assembly have hit a stumbling block, as South-East senators demand wider consultations before the proposed fiscal legislations can be considered.

The pushback from the South-East Caucus in the Senate, led by Senator Enyinnaya Abaribe (APGA, Abia South), emphasizes the need for inclusive stakeholder engagement to ensure the bills align with the interests of constituents and the broader public.

Following a closed-door meeting among senators representing the five southeastern states, Abaribe addressed journalists to outline the caucus’s position.

While clarifying that South-East senators are not opposed to the Tax Reform Bills, he stressed the importance of engaging with constituents, state governments, and critical stakeholders to refine the proposed legislation.

“As much as the entire senators from the South-East geopolitical zone are concerned, we are not against the Tax Reform Bills currently pending before both chambers of the National Assembly for consideration,” Abaribe said. “We only want wider consultations to be carried out on them.

Specifically, we need to consult with our constituents across the 15 Senatorial Districts in the Zone, with our state governments, and other critical stakeholders.”

The senator, who also chairs the Senate Committee on Power, emphasized that the caucus has thoroughly reviewed the bills and intends to share its findings with stakeholders across the South-East to ensure that any eventual framework is equitable and beneficial.

The Tax Reform Bills, which include the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill 2024, the Joint Revenue Board of Nigeria (Establishment) Bill 2024, and the Nigeria Revenue Service (Establishment) Bill 2024, were transmitted to the National Assembly by President Bola Tinubu on October 3, 2024.

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These landmark fiscal legislations aim to overhaul Nigeria’s tax system, improving administration and revenue collection.

However, since their introduction, the bills have sparked widespread debate across the country. While some stakeholders view the proposed reforms as necessary for boosting government revenue and streamlining tax administration, others have raised concerns about potential gaps and unintended consequences.

The South-East senators’ stance reflects broader concerns about the inclusivity of the legislative process. Abaribe underscored that consulting widely would allow for a more balanced approach to the bills, taking into account the unique economic and social realities of different regions.

“We have read through the bills and want to share our knowledge with other stakeholders from the South-East zone for a much more equitable framework in the bills that would eventually be passed,” he explained.

The South-East Caucus has not specified a timeline for its consultations, signaling that they are prioritizing thoroughness over speed. Abaribe’s remarks suggest that the caucus is committed to ensuring that the voices of South-East constituents are adequately represented before the bills are finalized.

The South-East senators’ position could significantly delay the legislative process. If the issue is raised as a point of order during plenary, it could disrupt the mandate of the Senate Committee on Finance, which has just four weeks left to submit its report on the bills.

In the House of Representatives, progress on the Tax Reform Bills has already stalled. Lawmakers there have suspended further deliberations until extensive consultations and robust stakeholder engagement are conducted.

The Tax Reform Bills have generated significant controversy since their introduction. While the executive arm of government and the South-South and South-West caucuses in the Senate are pushing for immediate consideration, opposition has emerged from various quarters.

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Groups such as the Nigerian Governors’ Forum, the Northern Senators Forum, and the Arewa Consultative Forum have echoed the South-East senators’ call for broader consultations. These stakeholders argue that the bills, as currently drafted, may not adequately address regional disparities or reflect the diverse economic realities of Nigeria’s states.

The executive arm of the federal government views the Tax Reform Bills as essential for addressing Nigeria’s fiscal challenges. By streamlining tax administration and enhancing revenue collection, the reforms aim to reduce the country’s reliance on borrowing and create a more sustainable fiscal framework.

However, critics argue that the executive’s approach has been too top-down, leaving little room for input from states, local governments, and other critical stakeholders. This perceived lack of inclusivity has fueled resistance from various quarters, including the South-East Caucus.

For the South-East, the call for wider consultations reflects deeper concerns about equity and regional representation. The geopolitical zone has long advocated for greater fiscal federalism and resource control, and the Tax Reform Bills are seen as an opportunity to address some of these issues.

By consulting widely with constituents and other stakeholders, South-East senators hope to ensure that the bills take into account the region’s unique economic realities. This includes considerations such as the predominance of small and medium-sized enterprises, which could be disproportionately affected by certain tax measures.

Navigating the controversies surrounding the Tax Reform Bills will require careful balancing by the National Assembly. On one hand, there is an urgent need to address Nigeria’s fiscal challenges and improve tax administration. On the other hand, the legislative process must be inclusive and equitable to ensure broad-based support for the reforms.

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The South-East senators’ call for consultations underscores the importance of stakeholder engagement in achieving this balance. By taking the time to consult widely, lawmakers can refine the bills to address regional disparities and ensure that the reforms are both effective and fair.

The Tax Reform Bills represent a significant step toward overhauling Nigeria’s fiscal framework, but their passage is far from guaranteed. With opposition mounting from the South-East and other stakeholders, the National Assembly faces a challenging road ahead.

The South-East senators’ push for wider consultations highlights the need for an inclusive legislative process that takes into account the diverse realities of Nigeria’s regions. By engaging with constituents, state governments, and other stakeholders, lawmakers can ensure that the Tax Reform Bills are not only effective but also equitable.

Ultimately, the success of these landmark reforms will depend on the ability of the National Assembly to navigate the competing interests and concerns of various stakeholders, striking a balance between urgency and inclusivity.


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