Tinubu’s Tax Reforms Will Ease Burden On Nigerians- Makinde

A former parliamentarian who represented Ife Federal Constituency at the House of Representatives in the 7th Assembly, Hon. Rotimi Makinde has thrown his weight behind President Bola Tinubu’s tax bills, adding that in the long run, Nigerians would praise the President’s legacies.

Makinde in a statement he made available to newsmen on Tuesday, December 17, 2024 maintained that, there was no basis to entertain any fear about the four bills that aim to overhaul Nigeria’s tax system which the President transmitted to the National Assembly few months ago.

Although the bills have sparked debates in the polity about the purpose of the bills.

Some have expressed fears that the bills may encapsulate proposals calling for a raise in tax rates in a way that will further burden the citizens.

Some Nigerians have received the news with mixed feelings, while others have chosen to wait for details before commenting on the development.

The Ife born politician, in his stern clarifications on Tuesday, said, “There is no basis to entertain any fear about these bills. If anything, Nigerians will commend Tinubu for laying a solid foundation that will ensure the fiscal stability of the country.

“When Nigerians get to know the details of the documents, they will know that the president is working to bring relief to them and their businesses and ensure a new lease of life.

“The reality is that every crusader or reformer faces challenges such as this mixed feelings we’re currently getting occasioned by the tax reform bills, but at the end of the day, we would all praise Tinubu’s legacies. He has shown that he’s not desperate for 2027 re-election, but rather to reform and reposition the country in such a way we would all be proud of.

“The four executive bills seek to tidy up the fiscal policy and legislation environment in the country. They are Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill. These bills seek to translate the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele, into an implementable legislative framework for the benefit of Nigerians.

“It is common knowledge that one factor that has continued to impede efficiency in Nigeria’s tax system and has negatively impacted revenue is the multiplicity of taxes. His Excellency, President Bola Tinubu, in his inauguration speech in 2023, had pledged to address the issue of multiple taxation and remove all hurdles against investment in the country. The myriad of taxes is one of the issues that the Nigeria Tax Bill seeks to end. This will certainly bring ease to corporate Nigeria. Imposition of tax by more than one agency or level of government, without a shadow of a doubt, constitutes a chokehold on businesses, especially micro and small businesses and individuals.

“How will this bill address multiplicity of taxes? In Nigeria today, laws dealing with various aspects of taxation are disorganised and disseminated into different legislations. Some of these laws are: Companies Income Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Value-Added Tax Act, Stamp Duties Act, Petroleum Profits Act, Tertiary Education Fund Act, Petroleum Industry Act, and so on. In addition to the tax-specific laws, there are many tax provisions in non-tax laws such as the NLNG Act, Tertiary Education Trust Fund Act, NASENI Act, Lottery Act, Companies and Allied Matters Act, etc. The list is seemingly endless.

“In enforcing these disparate tax provisions, unintended multiple taxation occurs, and this is one of the things that the bill seeks to address. The Nigeria Tax Bill aims to codify all of the taxing provisions into one single document, to be known as the Nigeria Tax Act when passed into law. In the bill, chapters are devoted to the various tax types in a simplified format. The proposed tax law is also written in a simple language that anyone with basic literary education can read and understand. The complexity of the extant law, for instance, is such that it will be pretty difficult for a Professor of Mathematics to compute his personal income tax on his own because of all the inter-twinning provisions that will confuse him, as to what income is taxable or what deduction is allowable. All these complications and complexities have been removed in the new proposals.

“In the proposed law, companies doing business within the country have been re-classified into two; small and large. This is based on the companies’ respective turnover thresholds. A company will be deemed small if its turnover is N50m or less in a year. Under the extant law, any company that records a turnover of N25m or less is not required to pay Companies Income Tax. In the new tax bill, companies with a yearly turnover of up to N50m will not pay CIT. As regards large companies, that is, those whose turnover thresholds are above N50m, there is a proposal in the bill to give some relief to them. The objective of this concession for such companies is attuned to Tinubu’s avowed commitment to protect small businesses and eliminate inhibitions that negatively impact entrepreneurship in the country.

“Perhaps the game-changer among the several pleasant provisions of this document is what the bill seeks to do with VAT. It is an eloquent testimony to the fact that Tinubu has listened and harkened to the complaints by Nigerians, particularly the ordinary Nigerians who are bearing the substantial brunt of the initial pain of the government’s economic reformation policies. In the proposed law, VAT will not be charged on all items that have a direct existential impact on the common people. Items such as food, medicals, education, transport business, and agriculture are not chargeable to VAT. For instance, tuition fees or rent paid by proprietors or purchases made by school owners for the business of educating Nigerians will be free from VAT. It is the same for owners of hospitals, those in agricultural business, and those who buy vehicles for transportation. These are the areas where the lives of the common people will be positively affected, especially given the temporary pain of the ongoing reforms.

“As a former lawmaker, I can reliably attest to many gains of this tax reform. It is purely in the best interest of the vulnerable segments of our country. Nigerians should, however, treat with disdain and contempt anyone who tries to politicize this viable, virile, and very well thought out reform introduced by President Tinubu at a time like this. For his pragmatic policies and especially the increase in crude oil production and for quality leadership in the last one and a half years. I am convinced absolutely that he should be passed with a vote of confidence, deservedly so. Nigerians need to be patient with Tinubu as the current economic hardship the country is going through has a fixed time to elapse, and we would soon consolidate on the gains,” the statement concluded

“The four executive bills seek to tidy up the fiscal policy and legislation environment in the country. They are Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill. These bills seek to translate the recommendations of the Presidential Committee on Fiscal Policy and Tax Reforms, chaired by Taiwo Oyedele, into an implementable legislative framework for the benefit of Nigerians.

“It is common knowledge that one factor that has continued to impede efficiency in Nigeria’s tax system and has negatively impacted revenue is the multiplicity of taxes. His Excellency, President Bola Tinubu, in his inauguration speech in 2023, had pledged to address the issue of multiple taxation and remove all hurdles against investment in the country. The myriad of taxes is one of the issues that the Nigeria Tax Bill seeks to end. This will certainly bring ease to corporate Nigeria. Imposition of tax by more than one agency or level of government, without a shadow of a doubt, constitutes a chokehold on businesses, especially micro and small businesses and individuals.

“How will this bill address multiplicity of taxes? In Nigeria today, laws dealing with various aspects of taxation are disorganised and disseminated into different legislations. Some of these laws are: Companies Income Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Value-Added Tax Act, Stamp Duties Act, Petroleum Profits Act, Tertiary Education Fund Act, Petroleum Industry Act, and so on. In addition to the tax-specific laws, there are many tax provisions in non-tax laws such as the NLNG Act, Tertiary Education Trust Fund Act, NASENI Act, Lottery Act, Companies and Allied Matters Act, etc. The list is seemingly endless.

“In enforcing these disparate tax provisions, unintended multiple taxation occurs, and this is one of the things that the bill seeks to address. The Nigeria Tax Bill aims to codify all of the taxing provisions into one single document, to be known as the Nigeria Tax Act when passed into law. In the bill, chapters are devoted to the various tax types in a simplified format. The proposed tax law is also written in a simple language that anyone with basic literary education can read and understand. The complexity of the extant law, for instance, is such that it will be pretty difficult for a Professor of Mathematics to compute his personal income tax on his own because of all the inter-twinning provisions that will confuse him, as to what income is taxable or what deduction is allowable. All these complications and complexities have been removed in the new proposals.

“In the proposed law, companies doing business within the country have been re-classified into two; small and large. This is based on the companies’ respective turnover thresholds.

“A company will be deemed small if its turnover is N50m or less in a year. Under the extant law, any company that records a turnover of N25m or less is not required to pay Companies Income Tax. In the new tax bill, companies with a yearly turnover of up to N50m will not pay CIT.

“As regards large companies, that is, those whose turnover thresholds are above N50m, there is a proposal in the bill to give some relief to them. The objective of this concession for such companies is attuned to Tinubu’s avowed commitment to protect small businesses and eliminate inhibitions that negatively impact entrepreneurship in the country.

“Perhaps the game-changer among the several pleasant provisions of this document is what the bill seeks to do with VAT. It is an eloquent testimony to the fact that Tinubu has listened and harkened to the complaints by Nigerians, particularly the ordinary Nigerians who are bearing the substantial brunt of the initial pain of the government’s economic reformation policies. In the proposed law, VAT will not be charged on all items that have a direct existential impact on the common people. Items such as food, medicals, education, transport business, and agriculture are not chargeable to VAT. For instance, tuition fees or rent paid by proprietors or purchases made by school owners for the business of educating Nigerians will be free from VAT. It is the same for owners of hospitals, those in agricultural business, and those who buy vehicles for transportation. These are the areas where the lives of the common people will be positively affected, especially given the temporary pain of the ongoing reforms.

“As a former federal lawmaker at the hallowed chamber, I can reliably attest to many gains of this tax reform. It is purely in the best interest of the vulnerable segments of our country.

“Nigerians should, however, treat with disdain and contempt anyone who tries to politicize this viable, virile, and very well thought out reform being introduced by President Tinubu at a time like this.

“For his pragmatic policies and especially the increase in crude oil production and for quality leadership in the last one and a half years. I am convinced absolutely that he would be passed with a vote of confidence, deservedly so.

“Nigerians need to be patient with Tinubu as the current economic hardship the country is going through has a fixed time to elapse, and we would soon consolidate on the positive gains,” the statement concluded.