The Senior Special Assistant to the President on Media and Publicity, Temitope Ajayi, has addressed widespread concerns surrounding the proposed Tax Reform Bills, highlighting their potential benefits for state governments. This comes after President Bola Tinubu directed the Ministry of Justice and the National Assembly to collaborate on refining the bills to address the criticisms.
Opposition and Concerns
The bills have faced significant pushback, particularly from northern governors, with Borno State Governor Babagana Zulum emerging as a leading critic. Opponents argue that the reforms could impoverish Nigerians and unfairly impact certain regions.
Ajayi, however, dismissed these fears, urging a detailed examination of the bills to appreciate their transformative potential.
President Tinubu’s Assurance
President Tinubu has tasked the Justice Ministry and legislative leaders to ensure that all genuine concerns are addressed before the bills are enacted. Minister of Information and National Orientation Mohammed Idris emphasized the government’s openness to meaningful contributions, denying allegations of rushing the legislative process.
Key Benefits for States
Ajayi outlined 10 ways the Tax Reform Bills aim to strengthen states’ fiscal capacities:
- Increased VAT Allocation: States will receive an additional 5% from the federal government’s share of VAT revenue.
- Exclusive Control of Electronic Money Transfer Levy: Revenue from this levy will be transferred entirely to states.
- Modernized Stamp Duty Laws: The repeal of outdated laws will enhance states’ revenue.
- Taxation of Limited Liability Partnerships: States will gain tax rights over these entities.
- Tax Exemption for State Bonds: Parity with federal government bonds will incentivize state-level financial instruments.
- Equitable VAT Distribution: Reforms will ensure higher VAT income for states through a fairer attribution model.
- Integrated Tax Administration: States will benefit from tax intelligence, capacity-building, and enhanced collaboration.
- Automatic Tax Remittance: Unremitted taxes from federal MDAs will be deducted and paid to states by the Accountant General.
- Autonomy for State Revenue Services: Enhanced independence for state revenue bodies will promote fiscal federalism.
- Taxation of Lotteries and Gaming: Introduction of withholding taxes will benefit state governments.
Encouragement to Embrace Reform
Ajayi emphasized the progressive intent of the reforms, which aim to empower states to become economic powerhouses. He called on governors to invest in infrastructure and manpower to harness the opportunities presented by the new tax system.
The presidency reiterated its commitment to creating a more streamlined, equitable tax system that promotes economic growth and fiscal strength across all levels of government.
