Breaking: The NEC Has Advised The Withdrawal Of President Tinubu’s Tax Reform Bills.

The National Executive Council (NEC) has recommended withdrawing the four tax reform bills submitted to Parliament by President Bola Tinubu. This decision was made during a meeting at the Presidential Villa on Thursday, chaired by Vice President Kashim Shettima, and included governors from all 36 states.

Oyo State Governor Seyi Makinde, who spoke to reporters after the meeting, explained that the NEC called for the withdrawal to allow for broader consultations and to build consensus around the proposed reforms. The bills have sparked controversy, particularly with the Northern Governors Forum opposing them.

These four bills were part of President Tinubu’s initiative to revamp Nigeria’s tax system. They aim to establish a central revenue service responsible for collecting all government revenues, including those currently managed by agencies like customs and the ports authority. Additionally, the bills propose allocating a larger share of VAT revenues to states, which has raised concerns among northern leaders who believe it could disadvantage their region.

During the meeting, the NEC emphasized the importance of alignment among stakeholders regarding these reforms, acknowledging existing miscommunication. A spokesperson for President Tinubu previously stated that the proposed laws would not increase current tax rates but would instead streamline and enhance the existing tax framework.

The reforms are designed to ensure a fairer distribution of tax responsibilities without adding to the burden on citizens, and they are not expected to lead to job losses. In fact, they aim to create new job opportunities by fostering a dynamic, growth-oriented economy.

Currently, tax administration suffers from a lack of coordination among federal, state, and local authorities, which leads to confusion and inefficiency. The proposed laws aim to improve this situation by harmonizing revenue collection and management across all levels of government, without eliminating the functions of any existing agencies.

Regarding the controversial derivation-based VAT distribution model, the spokesperson stated that the new approach intends to create a fairer system. It considers the place of supply or consumption, ensuring that states in the Northern region that produce essential goods do not lose out due to VAT exemptions or consumption in other areas. The ongoing tax reform seeks to address the inequities in the current model for distributing VAT revenues.

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