Proposed Tax Bills NOT Intended to Impoverish Any Region, But to Streamline Taxes, Improve Investment Climate- Tinubu
The presidency has made clarifications on the controversial tax bills currently before the National Assembly saying that the bills were primarily intended “to streamline tax administration in Nigeria and make the operating environment conducive for businesses.”
In a statement signed by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the presidency called on Nigerians, especially opinion leaders to avoid misinforming public by ensuring that “Relevant stakeholders and public analysts owe it a duty to properly educate themselves about the bills’ contents and avoid misleading the public for any reason. We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
Making reference to some specific controversies, the statement clarifies that the bills were not intended to make Lagos and Rivers states more affluent than other states in the country, but rather ensure that Nigeria as a country, Nigeria becomes more economically viable for investment.
On the claims that some government agencies including Tertiary Education Fund (TETFund), The National Agency for Science and Engineering Infrastructure (NASENI) and National Information Technology Development Agency (NITDA) have been earmarked to be scrapped by the proposed tax bills, the government clarified that there was no truth in such speculations.
The government rather notes that the agencies will have the opportunity of creating smarter ways of revenue generation noting that leading economies in the world have done so without imposing multiple taxes on innovators and investors.
Onanuga’s statement reiterated that President Tinubu welcomes the divergence of opinion on the tax bills, but urged the public to be patriotic in their criticism.
The full statement reads:
PART OF TAX REFORM BILLS RECOMMENDS SCRAPPING TETFUND, NASENI, AND NITDA…NO PROVISION WILL IMPOVERISH THE NORTH
Since the public debate around the transformative tax bills before the National Assembly began in the last few weeks, various political actors and commentators have tried to obfuscate the facts, deliberately misinforming and misleading the public.
Unfortunately, most reactions are not grounded in facts, reality, or sufficient knowledge of the bills. While some commentators have attempted to incite the people against lawmakers, others have polarized one section of the country against another.
The tax reform bills will not make Lagos or Rivers more affluent and other parts of the country, as recklessly canvassed, poorer. The bills will not destroy the economy of any section of the country. Instead, they aim to enhance the quality of life for Nigerians, especially the disadvantaged, who are trying to make a living.
Contrary to the lies being peddled, the bills do not suggest that NASENI, TETFUND, and NITDA will cease to exist in 2029 after the passage of the bills.
Government agencies, such as NASENI, TETFUND, and NITDA, are funded through budgetary provisions with company income tax and other taxes paid by the same businesses that are being overburdened with the special taxes.
One reason President Bola Tinubu embarked on the Tax and Fiscal Policy Reforms is the need to streamline tax administration in Nigeria and make the operating environment conducive for businesses.
For decades, businesses, investors, and private sector players in Nigeria have complained of being overburdened by a myriad of taxes and levies, including those earmarked to fund various government agencies and initiatives.
The multiple taxes complicate the economic environment, making Nigeria uncompetitive for investment and preventing many businesses from growing or continuing their operations. Some companies have had to make the rational decision to relocate to other countries. We can not continue on this path or wait for 20 years if this country is to deliver the prosperity we need for our people.
The proposal, as contained in section 59(3) of the Nigeria Tax Bill, only seeks to consolidate some of the earmarked taxes imposed on companies and replace them with a single tax to be shared with the key agencies as beneficiaries in a phased manner until 2030.
The time frame offers ample opportunity for the affected agencies to explore other funding sources in addition to budgetary allocations in line with the constitution and international best practices.
It is a misrepresentation of facts to conclude that changing an agency’s funding source amounts to scrapping it. None of the countries leading globally in education, science, engineering, or information technology have similar earmarked taxes.
The government imposes major taxes, be it income tax, consumption tax, or other taxes, to channel resources to its areas of priority at the time. Imposing a separate tax to fund an agency is an aberration that has yet to yield results despite the huge burden on businesses. The tax bill seeks to address this problem.
Relevant stakeholders and public analysts owe it a duty to properly educate themselves about the bills’ contents and avoid misleading the public for any reason. We may be entitled to our opinions, but such views must be informed and based on facts, not emotions targeted at inflaming passions.
In a period like this, when our people across the country look up to leaders for guidance and direction on matters of public importance, such as the Tax Reform Bills, leaders should be more measured in their public utterances to avoid heating the polity and polarising the country unduly.
President Tinubu welcomes the public interest these bills have generated. He encourages leaders across the country, including Governors, Traditional rulers, Civil Society Activists, Students, trade associations, professional associations, and the general public, to take advantage of the Public Hearings that the National Assembly will organise to present their views on how best to reform our taxes and fiscal regime.
What is never in doubt is the imperative of changing the existing tax laws and administration that have become obsolete and unhelpful in achieving the growth and development we desire for our country.
Bayo Onanuga
Special Adviser to the President
(Information & Strategy)
December 2, 2024