Northern Senators debated Tax Reform Bills aimed at easing tax burdens, boosting local revenue

Northern Senators held a two-hour closed-door meeting on Thursday after the Senate passed the controversial Tax Reform Bills for a second reading. The meeting, chaired by Senator Abdulaziz Yar’Adua, yielded no public comments, leaving details undisclosed.

Earlier in the day, the Senate instructed its Finance Committee to invite governors, traditional rulers, and other stakeholders for a public hearing on the bills, which aim to streamline tax laws and ease the burden on small businesses. These bills, introduced by President Bola Tinubu in October, include the Joint Revenue Board Bill, Nigeria Revenue Service Bill, and Nigeria Tax Bill. Critics, including northern governors, have opposed the bills, calling them "anti-democratic."

The National Economic Council (NEC) previously recommended withdrawing the bills to allow for more consultations, with Oyo State Governor Seyi Makinde emphasizing the need for alignment among stakeholders.

Despite opposition, the Senate resumed debates, led by Senate Leader Opeyemi Bamidele, who outlined the proposed reforms. These include:

• Increasing states’ share of VAT to 55% while reducing the Federal Government's to 10%.

• Exempting minimum wage earners and small businesses earning below ₦50 million annually from taxes.

• Lowering corporate tax from 30% to 25% for two years.

• Consolidating multiple taxes into a 2% development levy to fund student loans.

The reforms aim to simplify taxation, boost local revenue, and reduce economic inequality. Key exemptions include essential goods like food, medical services, and education fees.

Support for the bills came from several senators, including Minority Leader Abba Moro and Senator Seriake Dickson. Dickson highlighted the need for fiscal fairness, proposing that taxes generated in states like Bayelsa be retained there, rather than at company headquarters. He also criticized the "multiplicity of taxes" stifling economic activity.

However, Senator Ali Ndume opposed the timing of the bills, arguing for earlier consultations and addressing foundational issues like constitutional amendments. He cautioned against taxing small businesses at the same rate as large corporations.

Senator Tahir Mongunu countered, emphasizing that public hearings would address stakeholders’ concerns transparently.

Ultimately, the Senate passed the bills for a second reading and referred them to the Finance Committee for review. Senate President Godswill Akpabio assured that all voices would be heard during public hearings before the bills undergo final consideration.