The recent endorsement of the four tax bills currently before the National Assembly albeit with recommendations for amendments of certain provisions by the Nigerian Governors’ Forum, NGF is considered a milestone in the efforts of the President’s Bola Ahmed Tinubu’s administration to reform the Nigerian tax system.

President Tinubu had, in August 2023, barely three months in office, set up the Fiscal Policy and Tax Reforms Committee led by a distinguished tax expert, Taiwo Oyedele, to carry out a comprehensive reform of Nigeria’s tax system.  The Committee concluded its work about a year later, coming up with four new bills which, according to analysts, will change the character of taxation in Nigeria.

The Tax Bills are: The Nigeria Tax Bill (NTB) 2024, the Nigeria Tax Administration Bill (NTAB), the Nigeria Revenue Service (Establishment) Bill (NRSEB); and the Joint Revenue Board (Establishment) Bill (JRBEB). On 3 October 2024, President Tinubu submitted the four tax reform bills to the National Assembly for consideration.

In a letter read during their respective plenary sessions by Senate President Godswill Akpabio and Speaker of the House of Representatives, Tajudeen Abbas, the President also gave a brief explanation of the four bills. According to the President, the Nigeria Tax Bill 2024, aims to establish a comprehensive fiscal framework for tax regulation while the Tax Administration Bill seeks to provide a clear and concise legal structure for managing taxes in Nigeria to reduce disputes and enhance efficiency.

Also, the President said the Nigeria Revenue Service Establishment Bill is intended to repeal the Federal Inland Revenue Service Act and create the Nigeria Revenue Service. The Joint Revenue Board Establishment Bill was aimed at establishing the Joint Revenue Board, the tax appeal tribunal and the office of the tax ombudsman for the harmonisation, coordination and settlement of disputes arising from revenue administration in the country.

The President had in his letter said the reforms that will be fostered by the bills are alignment with his administration’s objectives of fostering economic growth by enhancing taxpayer compliance and strengthening fiscal institutions. He also said when passed into law, the bills would stimulate economic activity and establish a more effective and transparent fiscal regime.

“I am confident that the bill, when passed, will encourage investment, boost consumer spending and stimulate Nigeria’s economic growth,” the president said while urging the lawmakers to act swiftly on the bills.

In coming up with the four bills, the Oyedele Committee held extensive consultations with various segments of the Nigerian society, including members of the National Assembly and governors. “Altogether, the bills offer a comprehensive overhaul of the nation’s tax framework to drive economic growth, support Nigerian households, and position the country as a competitive economy within the comity of nations. These reforms reflect a commitment to equity, efficiency, and sustainable development,” Oyedele said in one of his numerous write-ups on the bills.

However, the extensive consultations did not prevent the reform initiative from being caught up in a gale of controversies after the bills were submitted to the National Assembly.   First were the fears that some of the provisions in the bills, especially as related to the adjustment in administration and sharing of Value Added Tax, VAT will be to the detriment of states in the Northern part of the country. Indeed, Borno Governor, Babagana Zulum had in a couple of interviews claimed that the adjustment in the VAT sharing formula in favour of derivation or consumption in the bill will be to the disadvantage of Northern States who need funds from that source to take care of the needs of their people, including paying salaries.

There were also pushbacks from lawmakers from the Northern part of the country against the bills. Specifically, the Northern Governors’ Forum also rejected the proposed VAT-sharing template, ”because companies remit VAT based on the location of their headquarters and tax office, rather than where the services and goods are consumed.”  The Northern Governors who spoke after their meeting in Kaduna therefore ‘unanimously rejects the proposed Tax Amendments.’ They also called on lawmakers elected from their part of the country in the National Assembly “to oppose any bill that could jeopardise the well-being of our people.”

Also, at the end of their meeting on 31 October, the National Economic Council (NEC) which was chaired by Vice President Kashim Shettima asked President Tinubu to withdraw the bills from the National Assembly. At a press briefing addressed by Governor Seyi Makinde, the NEC said the withdrawal of the bills was necessary to get the views of stakeholders including the state governors to ensure that the law is favourable to all Nigerians.

NEC said it decided after a presentation from the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms. While acknowledging that it is underperforming on all indices as regards yield from major revenue sources, tax to GDP ratio and so on, Makinde said, “Council, therefore, recommend the need to withdraw the bill currently before the National Assembly on tax reforms so that we can have wider consultations and also build consensus around these reforms for the benefit of the entire country, and also to give people, for them to know the vision and where we are moving the country in terms of tax reform because there’s a lot of miscommunication, misinformation. However, the President had rejected an appeal by the Governors for the withdrawal of the bills.

Rather, the President, in a statement by Bayo Onanuga, his spokesperson said the Bills should be allowed to go through the legislative process during which those opposed to any provisions can make inputs for adjustment. While the tax bills have passed a second reading in the Senate, deliberations on them in the House of Representatives have been suspended as a result of the controversies.

Significantly, Senate President Godswill Akpabio has indicated that he is committed to seeing the bills becoming laws.

But during his maiden media chat held on 23 December, the President had indicated that he will not back off on the tax reforms, despite pushbacks from different groups, including northern leaders:  “Tax reform is here to say. We cannot just continue to do what we were doing yesteryears in today’s economy. We cannot retool this economy with the old broken tools. The essence of the tax reform is to eliminate colonial-based assumptions in our tax environment,” the President said while acknowledging that it is usual for reform of the tax statement to attract controversies.   “Every tax situation without outcry is not a tax. You cannot satisfy uniformly the larger community of tax evaders. This tax reform is pro-poor; the vulnerable are not to pay taxes. All we are asking for is to widen the tax net and bake the cake larger so that we can share a larger meal. They will still ask for this consultation no matter how long I delay it. The hallmark of a good leader is the ability to do what you have to do at the time it has to be done. That is my philosophy,” he said.

Analysts believed that the President’s insistence during the media chat as further consultations with stakeholders continue led to the NGF’s eventual succumb to the bills. Indeed, the governors released a communiqué endorsing the bills after they met with the Taiwo Oyedele Committee.

While reiterating their strong support for the comprehensive reform of Nigeria’s archaic tax laws, the governors, in a communiqué issued by their Chairman,  Governor AbdulRahman AbdulRazaq, however, proposed a revised Value Added Tax sharing formula to ensure equitable distribution of resources among the different components of the federation.

The Governors suggested sharing VAT with  50 per cent based on equality, 30 per cent based on derivation, and 20 per cent based on population. They also proposed that there should be no increase in the VAT rate or reduction in Corporate Income Tax at this time while exemption essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.

Also, the governors recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies in the bills and they also declared their support for the ongoing legislative process will culminate in the eventual passage of the Tax Reform Bills by the National Assembly. In reaction, President Tinubu, in a statement issued by Onanuga expressed his appreciation for the Governors’ Forum for the unanimous endorsement of the four Tax Reform Bills.

He also lauded the governors for their bold leadership and commitment to fostering unity among leaders nationwide, transcending regional, ethnic and political barriers to advance Nigeria’s development. Furthermore, the president noted that the dialogue between the NGF and the Presidential Committee on Tax and Fiscal Policy Reform highlights the power of constructive conversation in resolving differences.

The President also encouraged other stakeholders with ideas and suggestions for refining the tax bills to engage with the ongoing legislative process at the National Assembly. “President Tinubu also urges the National Assembly to expedite the legislative process for the crucial bills so that the country can swiftly reap the benefits of the reforms,” the statement concluded. As it is, the next battle for the tax reforms will be at the National Assembly.

While the bills now have greater chances of being passed into law, the shape and form of what is to be adjusted, left out or added may just be the next phase of the battle.

Before the Governors endorsed the Bills, Oyedele spoke on the necessity for the tax reform bills, some of the provisions deemed controversial as well and how the tax reforms will benefit Nigerians on the lower rung of the ladder in this interview with AYORINDE OLUOKUN

I wouldn’t say I am surprised about the contentious issues, the controversies and the debates. Maybe I’m surprised about the issues that the people are debating and they are considering as controversial. Normally, when you do tax reform in any part of the world, people will have different views because taxes affect people personally, so they feel very emotional about it. And you also have to recognize that there are people who don’t necessarily agree with the government of the day. So, for them, the initial reaction will be ‘No’ – they have issues with the government of its ideologies. So, essentially, I think it is what it is- we will try to manage it as best as we can with the hope that ultimately, we’ll get the best outcome for our country.

Like in every aspect of life, things evolve, and even the economy itself has evolved; there were days when we didn’t have the internet, and there were days when we didn’t have mobile phones in Nigeria. And we are not even talking about 60 years ago; some of these things are about 20 years ago- as recent as that. There were days when you went to a bank and you had to take a tally number to withdraw money; you had to go to the branch where you opened your account to do the transaction before you could withdraw. So, though the economy and life generally have been evolving, the tax system in Nigeria has not evolved. So, we are stuck with the tax system that the colonial master gave us. Some of them are laws of 1939; you have some of 1959, you have 1964 laws. But we are in 2025. So, because the system has not evolved, it has become an impediment, a drawback to our progress; it is making it hard for us as a country to compete with other countries, so we are losing investment in other places. Even, businesses that are here – some of them are packing up and going elsewhere because those environments are more conducive for them. So, we have the option of folding our hands and keep praying to God – which is not a strategy- or we can do something about it. That’s the essence of the reform. For example, we used to have people who earned N3000 a year exempted from tax – that N3,000 was stronger than $3,000 when that policy was introduced. We did nothing to change that until about three or four years ago when it was increased to N30,000 per month. And even that N30,000 per month today is just about N1000 per day – by the time you take transport and food, you are broke before the 10th of the month, so, we need to adjust that. There were days when Nigeria’s budget was less than 100 million pounds – if you converted to naira at that time, maybe it was just a little bit more than N100 million.

But today, our budget is in trillions. If you make N100 million today, you are a small business, but that was Nigeria’s budget some 40, 50 years ago. So, because of the evolution of the economic space, society and human development, we need to also up our tax system to be able to drive our aspirations for growth. Those are the reasons for the reforms – to protect poor people, vulnerable people, and small businesses, allow investors – big and small, local and multinational to be able to invest so that we can create employment and also reduce the burden on poor people around taxation of personal income, withholding tax, VAT as well as the PAYE.

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That’s why I said earlier on that I’m not surprised about the debates and the controversies, but I am sometimes surprised about the issues that people are trying to present as being controversial. NLC and their members are some of the biggest beneficiaries of these reforms. The tax reduction and tax waivers on personal income tax are going to benefit more than 90 per cent of workers in Nigeria – in the private and public sectors. We also have provisions there to make housing more affordable; we have one for transportation, wage awards, and transport subsidies that will benefit workers. So, you will be wondering why labour will come out and say it is opposed to reform and that it should be the one advocating it, saying ‘This must happen like yesterday.’ So, to me, that was surprising.  But it is possible that they have not read the bills.

Yes, so we have explained how the reforms will benefit workers. The issue of consultations is also interesting. Our committee consulted widely. We started off our engagements with publications in newspapers, we have some of them via Zoom, we requested submission for inputs and we got inputs from every state in Nigeria. So, people from all states in Nigeria sent submissions to us- organized private sector, companies, professional firms, professional bodies, tax consulting firms, accounting firms, legal firms; we had sessions with more than 40 sectors – from Fintech to agriculture, to even the education sector, workers and so on. The interesting thing is that people who are interested in tax matters are not many and you can’t force people to be interested. We had engagements with CFOs, we had two sessions with journalists and two sessions with public analysts – people who go on radio and television to explain the reforms to them. But people don’t take an interest in tax matters.

But when it became controversial, everybody jumped on it, saying ‘They did not consult, they did not consult.’ But we are not supposed to go to every village and ask the town crier to call out everybody that we want to reform the tax system. There is no country in the world where you will do that level of consultation for tax reform. It is not a constitutional amendment. What you are supposed to do is to consult with key stakeholders, interest groups, organized private sector, governments, and institutions and we did all of that. But we are open to even more consultation.

What we don’t agree with is the idea of ‘withdraw the bills so that there can be consultations.’ I was involved in amending the tax laws under the past administration of President Muhammadu Buhari. We passed several Finance Acts. I was also involved in drafting the National Tax Policy in 2017. In those Finance Acts that we did for several years, including those where we have amendments to sharing formula on Electronic Money Transfers, the consultation was less than one per cent of what we have done now. But nobody complained about that. I’m sure that there are people who did not even know that those laws were passed and signed into law. So, we made efforts to consult, we consulted a lot of interested people. Some issues came up and we said we were ready to do more consultations, but we do not agree with withdrawing the bills so that we can consult. And like I said before, there are areas where we have extensive consultations like when we are trying to amend the constitution. The Revenue Mobilisation and Fiscal Commission has been consulting on the new revenue sharing formula since 2013 and we are in 2025 now and they’ve not been able to figure out a new formula for Nigeria. So, there is nothing that says that if you go to every village, everybody will agree with your tax bills. There will still be people who don’t agree. So, at a point, you have to decide what is best for the country, what will serve the interest of the majority of Nigerians and then, move on.

Unfortunately, tax reform is a specialist area; it is just like wanting to solve a medical problem and you go and ask people on the streets – mechanics, tailors, drivers about what to do. They will have their views, but they are not the experts. So, a lot of people who disagree with the proposed reforms have little or no knowledge about taxation. Many of them have never seen a VAT form before, they have never filed a tax return before, and they have never interacted with the Tax Promax that we used to file returns. So, they are using common sense to understand what we proposed. But because the level of trust is very low, they do not even trust what those of us who have expert knowledge are saying. And that is quite unfortunate because it makes it harder to make progress. So, essentially, what we are proposing is that first, VAT, in terms of how it is shared, we want the Federal Government to cede part of their share to the states so that the states can have more revenue. Nobody has contested that to the extent that I know. Then, among the states, we said, ‘let’s also tweak how they shared revenue so that we have more based on consumption per state – we proposed that to be 60 per cent; it’s currently 20 per cent. And then, the remaining 40 per cent should be shared on equality and population. But even, the 60 per cent that is based on derivation or attribution of consumption which is currently 20 per cent is being done in a lopsided way.

So, when VAT remittances are made, they are made from the head office, the FIRS attributes all of those VAT to the states where those remittances are made such that a state like Lagos with a lot of head offices, Rivers State with head office for many of the oil companies, FCT also has some head offices and is also like the head office for the MDAs benefit more.  So, if the Federal Government awards road contracts in Taraba or Edo and you are paying the contractor, the VAT is remitted in FCT. It doesn’t matter where the contract took place. So, that method of attribution of VAT is not fair because VAT is a consumption tax. It is not recognizing where the consumption took place. It is recognizing where the remittance was made. So, we say let’s correct that so that every state will get fair treatment and fair recognition for their contribution towards the VAT purse. And once we’ve done that correction, let’s every state keep 60 per cent of the contributions that they make in the spirit of equity and fairness. That’s what we essentially proposed.

One of the reasons we also proposed that is Lagos and Rivers are in court already. And as we speak today, the court of appeal judges that VAT should be administered by states. But the Federal Government asked for a stay of execution and it is waiting now at the Supreme Court. If the states win at the Supreme Court, VAT will become a state tax which is equivalent to 100 per cent derivation because everybody will start to keep all the money they generate, and there will be nothing to share with anyone. But we don’t think that is the best system for Nigeria in terms of VAT because VAT can become complicated if you want to deal with the 36 states and the FCT. Each state will have its different rates; some states will not recognize your input VAT and the Nigerian people are the ones who will suffer for it. So, we want to prevent something like that from happening. What was the incentive for Rivers and Lagos to go to court? It’s because they are not getting their fair share of their contributions. So, we’ve increased the amount that is shared based on derivation and there will be less incentive to go and fight to make it a state tax. So, these are some of the fundamental issues that we are trying to address.

There are several issues. The first one is that when you are selling goods or services that have VAT, once you charge VAT, the price will go up. That’s common knowledge and that is generally correct. But where we are in Nigeria today is that our VAT system is not in line with the rest of the world. Our VAT system is such that it allows a buildup of cost, making the final product more expensive. So, in the bill that we have before the National Assembly, we have proposed that businesses, when they pay VAT, should recover the VAT 100 per cent. That means if you are producing bread and you need to have a bakery, pay for electricity or even need to have a generator, buy diesel, pay for the electric bill, buy oil, sugar, flour, pay staff,  rent, and vehicle to go and deliver the bread to our customer – a lot of inputs that you need to produce bread already carry VAT. So, if you say I am exempted from VAT and you don’t exempt some of the things I am using to produce bread when you raise the VAT rate, I have to raise the price of bread.  But what we have done with the reform is to allow the person selling bread to claim all the VAT – whether they buy a car or even, the price of their phone, or electricity – any VAT that they pay, they will get it back. So, whether the rate of VAT is seven per cent, 10 per cent or 15 per cent, the person selling bread will get his VAT back. So, that means the bread is not affected by VAT regardless of the rate.

So, we have done that for food- more than 600 food items, we’ve done it for education – whether it is primary, secondary to university. We’ve done it for health – medical services and pharmaceuticals. In addition to that, we have exempted rent, transportation, and fuel products whether it is diesel, petrol and these things that we have exempted constitute 82 per cent of consumption. So, what we have done essentially is that the majority of the things that Nigerians will buy, the price will come down. In Nigeria today, if you render services, you don’t get input credit for VAT, but in our bills, service providers will get full credit. So, for the vast majority of items, the cost will come down. So, because the cost is coming down, our modelling shows that VAT revenue will reduce by about 60 per cent.  Remember that this VAT revenue is predominantly the tax revenue of the states and we don’t want states to be struggling to pay salaries. We now said on the things that are not essential consumption; let’s adjust the VAT upward so that we can plug some of the gaps that are there from giving relief to the masses from paying VAT. So, if you buy wine, you pay higher VAT, you buy beer, you go to a 5-star hotel, you buy a mobile phone- those kinds of luxuries are the things that we said let’s increase the VAT.  But it is not just in one big bang.

From seven and a half per cent, it goes to 10 from 10 it goes to twelve and half per cent and from there it goes to 15 ultimately between now and 2023 on those non-essential commodities. If you go to East Africa, you will see a higher VAT rate. So, it’s either people don’t trust our explanations or they just want to complain. Otherwise, we think that these reforms are things that people should support. And we’ve said that we just need to sit down with the governors. If they said don’t increase the VAT rate at all, we will be very glad to leave it as it is because it is their revenue. If we want to be very popular, we would have just reduced the VAT rate to five per cent and I will be the most popular person in Nigeria. But if we do that, some states will not be able to pay salaries next month. But that is not the kind of reform that we want.   We want this country to work.

This is another interesting issue. First, we set out to do these reforms with some very clear objectives. One of them is tax harmonization. So, there is no need to have over 60 taxes and levies when many countries that make 20 times our tax revenue have less than 10. So, we have to harmonize taxes and reduce the number, especially the ones that are similar, that’s one. So, today, we have the company’s income tax, education tax, NITDA levy, you have NASENI, you have police you have Financial Reporting Council of Nigeria- which got a tax in their Act in 2023 – just two years ago to fund their activities. It’s all over the place. It will get to a point where it will not make sense for anybody to do business in Nigeria because the taxes you will pay will be more than 100 per cent of your profit. At that time, you may no longer have a country. But we can’t wait for that to happen.

So, number one, is that all these taxes all over the place, take them away. We proposed that in the bill. But we are very, very passionate about education in particular. So, we now said let’s create a development levy – just one tax and then, we take that tax and share it with the critical agencies – TETFUND for education, NASENI for engineering, NITDA for information technology. So, we share like that and by 2030, we will no longer share with any agency other than the NELFUND, the students’ loan fund. What’s the thinking behind that? Number one, those agencies that are collecting these taxes now like NASENI which was set up in 1992 – there is a tax in the law that nobody was collecting until three or four years ago. Somebody just woke up and said ‘There is a tax that you are supposed to be collecting’ and he went to former President Muhammadu Buhari and then, the law was amended for the FIRS  to be collecting the tax for NASENI. But my point is that NASENI did not die when it was not collecting those taxes. An agency that is as important as the NEMA does not have a special tax. Many federal government agencies don’t have a special tax; they get their funding from the budget. Every country in the world funds their agencies through budgetary allocation. So, our point is that, let’s give these critical agencies time to adjust themselves while we then get budgetary allocation to fund their operations. But because we are so passionate about education, we said by 2030, the whole development levy should go to NELFUND. You know when students ask for loans from NELFUND to pay their school fees, the money is paid directly to their institutions which means the money that we are talking about is still going to fund education.

And when that money goes to universities by way of tuition, it gives the universities even more flexibility on how to use their funds. Today, you cannot use funds from TETFUND to pay lecturers. So, you have professors that are earning N400,000 a month.  Funds from TETFUND are only used for capital projects, research and training. They spent over N60 billion sending lecturers to different parts of the world. I don’t have issues with that, but if you ask me, that should not be their priority, a lot of that training can be done in Nigeria. But that’s not my problem because somebody can say I am having an issue with lecturers going abroad to study. But even with the small amount that people are paying to go to the university, some families still cannot send their children to the universities because they can’t even afford about N100,000 per term being charged for a little bit of tuition.

But with NELFUND, there is now hope that even if your parents have zero naira, you can go to school and the interest rate is low. And you don’t have to pay back until you start working. So, there is now hope for millions of households that their kids can go to school and have a brighter future. So, essentially by 2030, the universities will be getting all the monies from these development funds. And we also think it will allow the universities to charge more reasonable tuition – because what we are doing in Nigeria today is that we are subsidizing everybody. Not every student in a university or tertiary educational institution in Nigeria needs a subsidy. I’m paying the fees of about 15 students at the university, so I don’t need a subsidy. So, instead of N60,000 tuition for universities, maybe it should be about N300,000.

The poor people will get the loan; the people who are not poor will pay for themselves. The amount of money that will be available to the universities will be multiple times what is available now. And they will be able to pay lecturers well, they can get equipment, do capital projects, and our standard of education can rise. Before the Education Tax was introduced in 1993, Nigerian universities were ranked in the top 1000 in the world. Today, we can’t even make the top ten in Africa. So, it is very clear that an education tax is not the solution to the problem. We looked around the world and we couldn’t find a single country which is doing well in its education system with funding from education tax. What we found in most countries is something similar to a loan scheme. But at the end of the day, I think it is up to ASUU to think about this carefully rather than just object. We even think that by 2030, we may have sufficient funds to turn that into a scholarship scheme and it will no longer be a loan. So, anybody who is from a poor family, the government will just pay your fees through that fund and the rest of us who are not poor will pay from our purses.  It is about moving the country forward and hopefully; people can see the reasons behind the reforms and our proposals.

For workers, what we are proposing in the bill is that anybody who is earning about N1 million a year, which is about N83,000 per month should not pay the PAYE. And then, if you are earning between N1 million and N20 million a year – that’s up to N1.7m a month, your PAYE will be reduced because that’s the bulk of the society  – it covers over 90 per cent of the workers. Then, for the people who are not so poor- earning N50 million – by any standard, even, if you go to the U.S., you will be among the top people there because there are not many people in the world who earn that kind of money. So, we are asking those people to pay a little more and it’s not even a lot.  Today, the highest effective tax rate is about 19 per cent. So, we move it to 25 per cent for the high-net-worth individuals. If they live in Kenya, they will pay like 35 per cent, if they live in South Africa, they will be paying more than 40 per cent. So, in most developed countries, even, in Africa, the tax rate for high-income earners is much higher. Nigeria is one of the lowest in Africa and in the world. So, we are saying ‘Give us a little more if you are rich so that we can use it to cover part of the hole that we are creating by exempting the poorest people’. And that is one of the objectives of the reform – making the system progressive. Also being fair means that if you are poor, we should not be asking you to pay tax. And if you’re rich, you should not be exempted from paying taxes because that is not how to build a just society. In a just society, people pay according to their ability. That’s the recommendations around the personal income tax and PAYE.

We think that what states and local governments want is more revenue. It’s not like they are insisting that they must collect a particular tax. If you go into our constitution today – under the fourth schedule- some of the taxes that the local governments are supposed to be collecting include produce tax, wheelbarrow tax, bicycle tax, and TV and radio license. On which planet would you be collecting tax from wheelbarrow pushers and bicycle owners nowadays? Maybe, during the colonial era, people who had bicycles were like the middle class because then, you can easily count the number of cars in Nigeria. So, if you are well-to-do, you will have a bicycle. In my village where I grew up, there were only two TVs – black and white TVs. So, if you say pay TV tax at that time, it makes sense because you are targeting the middle class. Today, those are not the middle class anymore. We cannot be taxing bicycles, wheelbarrows and farm produce. So, what we are saying is that since your interest is in collecting revenue, we can find revenue for you in a manner that does not disturb the lives and livelihoods of the people and will not overburden the vulnerable population. So, don’t collect those nuisance taxes- that’s what we call them.

Maybe, you just need to collect one or two taxes. And we said, for local governments, for example, you can just harmonize your levies – you can draw up a table – if you are a mechanic and you work in the city, in a year, maybe you pay N5000. That’s all that you will pay. If you are a mechanic and you work in the village, maybe you pay N2000. Tailors, hairdressers – you can have all those categories- and you can still pay N5000. We’ll allow you to pay it as you find the money. The day you find N500, you just dial star –something-something and you pay. Your balance is N4, 500. We don’t have to put wood with nails on the streets, disturb vehicles, remove side mirrors, go to the market and carry their wares and they will be chasing you – we are better than that. This is 2025 and we are not in 1944 or 1914. I haven’t been to any country, even in Africa where people still collect tax like in the olden days, the Stone Age as we are doing here. What we are proposing is that for states and local governments, let’s harmonize the taxes- collect a few taxes that are broad-based, and easy to collect and revenue will go up and we will stop maltreating our citizens and getting into fights with them every time.  A lot of these revenues don’t even get to the government; there are a lot of leakages.

So, the people end up paying a lot and the government collects little, therefore people cannot get the benefits of the taxes they are paying because it is not showing in government revenue. So, our proposals say let’s modernize tax payment; nobody should pay taxes in cash. If you don’t have a mobile phone and you don’t have a bank account, then, you should not pay tax at all. That’s because if you live even in a village, you are not educated, but you have income, you will have a phone. But those who don’t have a phone, and don’t have a bank account are just too poor; they should not pay any tax. Just leave them alone.  People who have phones, bank accounts and any economic activity, tell them how much to pay and let them pay through their phones. There are more than three million POS all over Nigeria now. In Kenya, they have messed up even old women and men are using it for everything. It’s very easy. If you can load credit to make calls, then, you can do it.

There is no inheritance tax in the bills. So, let’s be very clear. What’s in the bill is family income. There is personal income tax if you work as an employee and they pay you a salary, you will pay tax. If you own a house in Abuja or anywhere and you rent it out and collect rent, you will pay tax that is the right thing to do because you are liable to tax on your income. Now, imagine that we say this house is not our house, we say it is our family house and we now rent it out, should our family be exempted from paying tax on the rent income? If you exempt our family from paying rent, then, everybody will turn their house into the family house. It’s very easy. And that’s going to create a big loophole for the tax system and can even make the states go bankrupt. By the way, this provision of family income has been in our tax laws even before independence. So, it is not a new provision. It was one of those provisions in the old laws that we transferred into the new bill, just to say family income is liable to tax. Inheritance is about assets- for example, the father gives his house to his son or I can say the money I have in my accounts or my shares, I give them to my daughter. That’s inheritance.

When you do that from an accounting point of view, there is no increment in the wealth of that family – what you’ve done is that you remove something from the sitting room to the bedroom. If you remove something from the father to the son, there is no income. So, it is when you earn an income like rent if you write a book for a family and in the end, there is royalty from it – those are the kinds of incomes that we are talking about. So, it is not an inheritance tax. But the other interesting aspect is that this tax that we are even talking about is a tax of the states. So, if they insist that it is inheritance tax and it’s passed into law, then, any state can say we don’t like inheritance tax and nobody will sue you that you are not collecting it. And the states where they like to collect family income tax let them collect it. We cannot remove it from the law and suffer everyone.

I think the issues of restructuring, regionalism are just speculations from politicians and people who just like to make issues out of nothing. The bills are written in black and white. There is nothing that is hidden there. Just because the VAT law today says share VAT 20 per cent derivation, 50 per cent equality, 30 per cent population and we now say, calculate this derivation properly to recognize where consumption takes place and give 60 per cent of the consumption to the place where it takes place – how is that regionalism? It has nothing to do with regionalism. It has everything to do with consumption taking place in every state – because that is the only thing that is remotely connected to all these regionalism and restructuring. The rest of it is how we reduce the PAYE for poor people, reduce company income tax for businesses, you promote export. So, everybody can go through the bills; they are written in black and white and they should please point to us where regionalism is included in those bills. That is not the intention.

Mr. President never gave us that mandate and did not dictate anything to us. The work of the committee was the outcome of deliberations of more than 100 Nigerians cutting across all the regions – from North to South, Christians, Muslims, males and females, and government institutions deliberating on what is best for their country.

For us, it is not even about waiting for the public hearing. We had a very productive retreat with the Senate including the President in 2023 after our committee was set up for two days in Uyo. We also had a smaller one for the House of Representatives. We have continued to engage and, in a few days,  I will also be meeting with the Senate- they set up a committee. For us, we believe that lawmaking is the duty of lawmakers. So, we are just only explaining our thinking to them, they decide to say whether the thinking makes sense, whether they want to keep it or whether they don’t want to keep it. They are also the ones representing the people, so at the end of the day, it is their call to make. We must explain. We’ll go and explain every single time they call us, we will go and explain to them, supported by data, not emotions, not vested interests or narrow thinking. We believe that because they also want the best for the country, they will see the reasons behind our proposals and where the proposals are not the best for Nigeria, we are open to them fine-tuning. It is their prerogative on what the outcome will be.

What will be the consequences if lawmakers decide to reject the bills at the end of the day? 

I don’t want to envisage a scenario in which the bills will be rejected as a whole because that will mean that we’ve lost the opportunity to reform the tax system of the colonial era while at the same time, we are hoping that Nigeria will just magically develop. Those two aspirations are at variance; you cannot develop your economy and have a better society with a tax system that is stuck in the past. So, we would prefer an outcome where we tweak areas that people feel so passionate about, where there are controversies and where there are superior arguments to what we have proposed supported by data.

We can do those fine-tuning and then pass the law. But to reject the whole bill – there are four bills with more than 200 provisions and people disagreeing with two of five provisions should not be the reason for everything to be thrown out. They can even just drop those that people are disagreeing with and maybe another three, or four years, the government may want to do an amendment when everybody has calmed down a little more. But if the whole bills are rejected it will be a setback – a significant one for Nigeria. I think that history will not forgive us if we allow that to happen.