How New Tax Reforms Will Make Nigeria Richer – Temitope Ajayi

Temitope Ajayi, Senior Special Assistant to President Bola Tinubu on Media and Publicity, has voiced his support for the new tax bill that has generated mixed reactions from Nigerians and faced fierce opposition from lawmakers and politicians, particularly from the Northern part of the country.

Also Read: Analysis: Why Northern Political Elite Are ‘Angry’ With Tinubu’s Tax Reform

In an opinion piece, Ajayi claimed that those opposing the bill, including Borno State Governor, Professor Babagana Zulum, have not thoroughly examined its provisions.

“If Governor Zulum and other voices of resistance, who think the states will be shortchanged, had actually taken time to examine the four executive bills, they would see how progressive and transformative the bills are,” he wrote.

He continued: “They would also discern the thought behind them, which is primarily to make both the Federal and sub-nationals fiscally stronger and buoyant.”

Ajayi outlined 10 ways the new bill will serve Nigeria better:

Increased VAT Share: The federal government will cede 5% out of its current 15% share of VAT revenue to states.

Electronic Money Transfers: The bills will transfer income from the Electronic Money Transfer levy exclusively to states as part of stamp duties.

Modernized Stamp Duty Laws: They seek to repeal obsolete laws and simplify processes to enhance state revenues.

Taxation of Partnerships: States will gain rights to tax Limited Liability Partnerships.

Bond Tax Exemption: States will enjoy tax exemption on their bonds, putting them on par with federal bonds.

VAT Equity: A more equitable VAT distribution model will be implemented.

Integrated Tax Systems: Improved tax intelligence and dispute resolution through an expanded Tax Appeal Tribunal.

Unremitted Taxes: Powers for the Accountant General to deduct unremitted taxes and pay beneficiaries.

Enhanced Autonomy: Frameworks for state Internal Revenue Services and a stronger Joint Revenue Board.

Taxation of Lottery and Gaming: Introducing a withholding tax for lotteries and gaming to benefit states.

Ajayi argued that the bill will not only streamline Nigeria’s tax system, catalyzing economic growth, but the tax and fiscal policy reforms it contains would also provide incentives for states to become economic powerhouses.

Meanwhile, following opposition to the bill, the National Assembly has suspended the public hearing and set up a special forum to reexamine its provisions.

“The Senate of the Federal Republic of Nigeria, like similar bodies globally, serves as a stabilizing force in times of difficulty or disagreement. Through dialogue and consensus, the Senate has consistently provided solutions to national challenges since 1999,” Deputy Senate President Jibrin Barau, who presided over the plenary session, said on Wednesday.

He added: “In this regard, we have decided to set aside politics, ethnicity, and regionalism to work together on resolving the issues surrounding the tax reform bills.

“In collaboration with the Executive Arm of Government, we agreed to establish a forum to identify and address contentious areas to ensure national unity and progress.”