Tax Reform Bills will destroy the north – Gov. Zulum

Governor Babagana Umara Zulum of Borno State has expressed strong opposition to the tax reform bills sponsored by President Bola Tinubu’s administration.

Governor Zulum warned that their implementation would be detrimental to the northern region and other parts of the country.

According to reports, the proposed legislation seeks to prioritise the location of consumption as the basis for sharing Value Added Tax (VAT).

The proposed legislation has faced widespread resistance, particularly from northern stakeholders, including governors, traditional rulers, and the Northern Elders Forum.

Despite this opposition, reports claim that the Senate passed the bills for second reading on Thursday amid a rowdy plenary session.

In an interview with the BBC Hausa service, Governor Zulum criticized the laws’ rapid advancement, drawing a comparison to the years of debate that previous legislation, such the Petroleum Industry Bill, underwent prior to passing.

According to him, the costs might be disastrous for the north as well as other areas, such as the South West.

He said: “We condemn these bills transmitted to the National Assembly.

“They will drag the north backward, and not only the north, South East, South West, and some states in the South West such as Oyo, Osun, Ekiti, Ondo, will have problem with these bills”.

He further stated: “It is not opposition.

“This, based on our understanding, is something that will destroy the north in its entirety.

“Therefore, we call on President Bola Ahmed Tinubu and others to review this decision.

“He secured 60% of his votes in the north.

“He should not listen to those telling him that northerners are not supporting him”.

The governor emphasized the proposals’ possible repercussions, cautioning that if the reforms are put into effect, northern states may not be able to pay their employees’ salaries.

“How we see it is, if these bills scale through, we will not be able to even pay salaries.

“And if we paid, it won’t be sustainable the following year”, he pointed out.

The governor was asked whether the reforms could worsen hunger, poverty, and insecurity in the region.

He affirmed, saying: “Including security.

“But they’re saying otherwise.

“We are against it, Lagos is against it; that it will drag it backwards.

“If this is the situation, then why won’t they rescind it?

“Our National Assembly members and even some from the Southern region are not in support of these bills”.

Governor Zulum made it clear that his criticism of the laws should not be interpreted as a criticism of President Tinubu’s administration.

He stated: “This is our stand and doesn’t mean that we are against the government.

“We supported and voted for him (President Tinubu).

“But these bills will not mean good for us”.

About the Tax Reform Bills

President Bola Tinubu’s administration has sponsored four tax reform bills aimed at streamlining tax collection, ensuring compliance, and optimizing revenue.

These bills are expected to provide a clear and concise framework for the efficient administration of all tax laws, ensuring compliance and reducing tax disputes.

The first bill is the Nigeria Revenue Service Establishment Bill, which seeks to repeal the Federal Inland Revenue Service Bill No. 13 of 2007 and establish the Nigeria Revenue Service.

This new service will be responsible for accessing, collecting, and accounting for revenue accrued to the federation.

The second bill is the Joint Revenue Board Establishment Bill, which aims to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombudsman.

These institutions will be responsible for harmonizing and coordinating revenue administration in Nigeria, as well as settling disputes arising from revenue administration.

The third bill is the Nigeria Tax Bill 2024, which proposes several key provisions, including an increase in Value-Added Tax (VAT) from 7.5% to 10% by 2025, with further increases to 12.5% from 2026 to 2029, and 15% from 2030 onwards.

The bill also proposes a 27.5% company tax rate, a 5% excise tax on lottery and gaming income, and a 5% telecoms tax.

The fourth bill is the Tax Administration Bill, which will provide a clear and concise legal framework for all taxes in the country.

This bill is expected to enhance taxpayer compliance, strengthen fiscal institutions, and foster a more effective and transparent fiscal regime.

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