By Gift ChapiOdekina, Abuja

The House of Representatives has passed for second reading four consolidated tax reform bills submitted by President Bola Tinubu on Wednesday, with no opposition from members.

The bills included the Nigeria Revenue Service (Establishment) Bill, the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board (Establishment) Bill.

Recall that the bills were first read on October 8, 2024, but the debate was delayed due to disagreements on the Nigeria Tax Administration Bill, primarily from northern leaders and the Nigerian Governors Forum. Despite this, Speaker Abbas Tajudeen encouraged members to consult widely with their constituents before debating the bills.

Before Wednesday’s debate, the House consolidated the four bills into one. House Leader, Rep. Julius Ihonvbere, led the debate, commending President Tinubu for his courage in introducing reforms aimed at addressing multiple taxation, enhancing revenue collection, and diversifying the economy.

Ihonvbere also appreciated those who opposed parts of the bills, noting that their concerns helped strengthen the proposed reforms. “The spirit behind the bills is to overhaul the tax system in this country,” he said.

Speaking also on the bill, Minority Leader, Rep. Kingsley Chinda, acknowledged that while there were concerns with certain provisions, the overall intent was commendable.

He said : “We have all agreed that the spirit behind the four bills is good, but we have issues with some of the letters of the bills. While we oppose some parts, we support the spirit and will ensure that the letters are corrected in the interest of Nigerians.”

Rep. Bamidele Salam emphasized that legislation must prioritize the welfare of ordinary Nigerians.

“Whatever system, policy, or law we bring on board, the first consideration must be the welfare of the majority of Nigerians—those who can barely afford basic necessities,” he argued. He praised the provision that reallocates a larger share of VAT proceeds to state governments, reducing the federal share from 15% to 10%.

Rep. Adedeji Stanley Olajide highlighted the financial needs of the country, especially in areas like education and technology.

“We are going to require a lot of money to grow our economy, particularly in the area of artificial intelligence,” he noted, calling for adequate funding to support these initiatives.

Rep. Isiaka Ibrahim suggested that the bill should impose penalties not only on tax evaders but also on officials who mismanage taxes.

“Taxpayers will be more willing to pay taxes if they see them being used for their intended purposes,” he said.

Rep. Sada Soli expressed concerns about ambiguities and contradictions within the bill, especially regarding constitutional and jurisdictional matters.

He stressed the need for clarity on key terms like “derivation” and “artificial transactions,” which could cause implementation challenges.

Rep. Babajimi Benson supported the bill’s state-centric approach, pointing out that it gives states more control over revenue collection.

“The bill allows states to collect stamp duties and gives them a larger share of VAT revenue,” he said, commending the bill as a progressive step toward fiscal federalism.

Rep. Nnolim Nnaji emphasized the importance of properly utilizing tax revenue for public utilities, including electricity and healthcare.

“It’s not just about raising funds; it’s about using those funds effectively to improve the lives of Nigerians,” he stated.

Rep. Clement Jimbo praised the reforms as crucial for development. “Reforms are an integral part of development,” he said, emphasizing the need to close gaps in the country’s revenue generation system.

Rep. Abubakar Assam Fulata recommended digitizing the audit process to prevent companies from submitting different financial reports to different agencies. He also warned against granting executive exemption orders, which could undermine the tax system’s integrity.

Several lawmakers raised issues concerning inconsistencies and the need for more clarity in the bills. Rep. Fulata pointed out, for example, the potential problem of double taxation, where both buyers and sellers of property could be taxed. He also raised concerns about inheritance tax from a religious perspective.

“I’d like to also advise that there could be a digitization of audited accounts in the new bill which would stop the rampant or incessant frivolous issuance of accounts, statements, and audited accounts by companies.

“This I mean by companies submitting a different account to the Corporate Affairs Commission. Then they submit a different account to FIRS in a bid to lower their incomes. So I think that this should be digitized in a manner that what you submit is what will be used for you.

“I also want to advise against executive issuance of exemption orders. Overall I submit the general principles of this bill again and I pray that it goes to a second reading where stakeholders will make their further observations.

So all the bills, except the tax administration, the bill has an interpretation clause. Others do not have, all three. Therefore, we must ensure that there is an interpretation clause on the other three bills.

Secondly, Mr. Speaker, I know as the Chairman of the House Committee on University Education, the wonderful job TETFUND is doing in the education sector. Therefore, my position is that these agencies, TETFUND, should be retained. The clause dealing with their systematic phasing out should be completely deleted, Mr. Speaker.

“Mr. Speaker, the bills, all the bills have inconsistency clauses equating them with the Constitution. I’m here, for example, to give an example of Sections 197, 198, 199, 200, 2001, and 2002, especially, making statements on inconsistency in any bill that is termed null and void. All the inconsistency clauses should be removed.

“The bills also seek to amend over 40 acts, 40 acts which have not been placed before us. Those 40 acts should be placed before us so that we compare them against those bills. About 40 acts are being repealed and being phased out by these acts that we are dealing with, Mr. Speaker.

“As a Muslim, we don’t tolerate inheritance tax. You don’t take away from the property, from the wealth of the orphan, and give it away to any other person. Finally, I posit that the VAT-sharing formula should be based on 50% equity, 20% population, and 30% association.

Lawmakers largely supported the bills but also raised concerns that would be addressed in the next stage which is at the Public hearing.

Speaker Tajudeen thanked the members for their contributions, urging further consultation and refinement of the bills as they moved to the Committee on Finance for further scrutiny.