Senate President Godswill Akpabio, yesterday came under fire from the Nigeria Labour Congress, NLC, Trade Union Congress, TUC, and Nigeria Employers Consultative Association, NECA, over his comments that only 30 per cent of Nigerians pay tax but want more from the government.
Akpabio, who made the statement while declaring open a two-day public hearing on the controversial tax reforms bills organised by the Senate in Abuja yesterday, also described tax reforms as the future of Nigeria which must be gotten right.
But the NLC, TUC and NECA in swift reactions, said Nigerians evade taxes where the government remains unaccountable to the people.
Meanwhile, President Bola Tinubu, according to the chairman, Senate Committee on Finance, Senator Sani Musa at the public hearing, asked the Senate to give him workable laws from the bills he sent to the Upper chamber on October 3, 2024.
This is even as stakeholders in the polity, including the Nigerian National Petroleum Company Limited, NNPCL; Revenue Mobilisation and Fiscal Allocation Commission, RMFAC; National Association of Chamber of Commerce, Industry and Agriculture, NACCIMA; Arewa Think Tank; and Retired Permanent Secretaries, threw their weight behind the bills.
Also supporting the bills were the Institute of Chartered Accountants of Nigeria, ICAN, Chartered Institute of Bankers, Market Academy of Nigeria, Ministry of Trade and Investment, and Association of National Accountants of Nigeria, ANAN.
Similarly, the Arewa Think Tank, led by the convener, Muhammad Yakubu, debunked insinuations that the North is against the bills.
Recall that the tax reform bills which are (i) The Nigeria Tax Bill (NTB) 2024, (ii)The Nigeria Tax Administration Bill (NTAB) 2024, (iii)The Nigeria Revenue Service (Establishment) Bill (NRSEB) 2024 and (iv) The Joint Revenue Board (Establishment) Bill (JRBEB) 2024, were passed for second reading in the Senate on November 28, 2024, and forwarded to the Committee on Finance for more legislative inputs through yesterday’s public hearing.
Declaring the public hearing open, Akpabio said the tax reform bills presented before the Senate and the House of Representatives, formed the future of Nigeria, stressing that ‘’it must be got right.’’
He said the Senate is not in a hurry to rush the bills as there would be clause-by-clause consideration before they are passed.
‘Only 30% of Nigerians pay tax’
Akpabio condemned the poor culture of tax payment in the country, saying that not more than thirty per cent of Nigerians pay tax to the coffers of the Federal Government, but want the best to be provided by government in the areas of infrastructure, education, security, among others.
He noted that ensuring that the tax laws serve the best interests of Nigerians, by enhancing revenue for national development was the responsibility of every Nigerian men, women, and children alike.
According to him, when the bills are passed, the National Assembly will improve on its oversight on the government to ensure that the resources are spent judiciously.
He said the public hearing should be used to think a better Nigeria, and assured that he would stay for the two days of the public hearing and participate in the process.
The Senate president lamented that most leaders in the country never saw the content of the bills before attacking the process.
“I don’t think up to 30 per cent of Nigerians pay taxes but 100 per cent of Nigerians want good roads. As lawmakers, we will ensure that every revenue that comes into government’s purse is well utilised,’’ he said.
While calling on Nigerians to avail the committee their perspectives on the proposed tax reform initiatives, Senator Akpabio noted that in some countries of the world, people get fined for driving their cars too fast, adding that in Nigeria, no such sanctions apply.
“In some countries, you pay tax for driving your car too fast. In Nigeria, nobody taxes you, even if you are going 140km/hour. It is time to rethink our tax laws,’’ he said.
Akpabio, who urged participants and Nigerians to get copies of the bills, x- ray them property instead of relying on social media, described the social media as garbage-in, garbage-out.
He said: “We are here not just to debate, but to make informed decisions that will shape Nigeria’s economy. At the House of Representatives, we have been actively engaging various stakeholders, including young minds, to ensure inclusivity in governance.
“I hope these engagements continue until we have fully addressed all concerns, ensuring that our tax laws serve the best interests of the Nigerian people. Enhancing revenue for national development is a responsibility that concerns every Nigerian men, women, and children alike.
“Effective taxation is not just about governance; it is about ensuring that our resources are managed efficiently to build a prosperous future. As members of the National Assembly, particularly the Senate, we are not here to make laws for the sake of making them.
“We aim to leave behind enduring legacies. Laws should serve the purpose of good governance and economic progress. In crafting these reforms, we are considering past challenges, current realities, and future possibilities to create a fair, efficient, and modern tax system.
“The tax reform bills we are discussing today are not just about revenue collection, they are about fostering economic growth and ensuring social equity. We recognise the misconceptions and concerns surrounding taxation, and we are determined to pass laws that truly benefit the majority of Nigerians.
“Oversight is a key function of government, and we are committed to ensuring that all revenue collected is transparently and effectively utilized for national development.
The Senate President noted that one of the aims of the reform is to change laws already obsolete and no longer in consonance with present day realities, adding that “some of our existing tax laws date back to colonial times and require urgent modernisation to reflect contemporary economic realities.
He said: ‘’Tax compliance should not be a burden on citizens. We need a system that is fair, transparent, and efficient. There is no reason for unnecessary complexities that only serve to discourage compliance. The goal of these reforms is to harmonise tax administration, reduce collection costs, and improve overall efficiency through digital innovation.
“One of the major concerns is how tax revenue is distributed. For example, if a brewery operates in Ogun State but its headquarters is in Lagos, the tax revenue is collected in Lagos, while Ogun, the state that hosts the factory, sees little benefit.
“This imbalance must be addressed. The areas where goods and services are consumed should also benefit from the revenue generated. I understand that tax reform discussions have sparked strong reactions.
‘’Some fear that the new framework will not be in their favour. However, I urge everyone to study the proposed reforms before forming opinions. If you don’t have a copy of the bills, ask the chairman for one. Since this is a two-day event, take the time to review the content before contributing to the discussion.
“Don’t base your arguments on social media opinions, read the bills, analyze them, and present well-informed recommendations. Let me be clear: I will not run the Nigerian Senate based on social media debates.
“Social media can be misleading, and policy decisions should be based on facts and thorough analysis. Instead, let us focus on constructive discussions. Look at our tax system, how has it functioned in the past? Where does it need improvement? We all agree that reform is necessary, so bring your ideas to the table.
“Engage with your colleagues, lawmakers, civil society organizations, and NGOs. Present well thought-out recommendations, and we will consider them seriously. I assure you that five years from now, we will look back and say, ‘yes, thanks to the National Assembly, we have built a better tax system.’ This partnership is essential for progress, and I welcome your contributions.”
Tinubu has good intensions — Sen Musa
Earlier in his opening remarks, chairman of the Senate Finance Committee, Senator Sani Musa said: “The President has a good intention. I met President Bola Ahmed Tinubu two days ago on the tax reform bills and he told me ‘Mr Chairman , Senate Committee on Finance, go and do the needful, give me a law that is workable from the tax reform bills I forwarded to the Senate and the House of Representatives in October last year.
“Give me a law that is working. We will want to present a legislation that tomorrow, there will be not be a lot of lawsuits.”
Musa, who noted that Nigeria is becoming more united with the tax reform bills, noted: “Where there are some differences or disagreements, we will agree and come to where we can all agree. We are going to give Nigeria the desired law, legislation that will guide our tax collection, distribution and enhance prosperity, in line with the new rule of the President.
He said: “Both the Senate and the House of Representatives have done the second reading on the reform bills and are ready for the public hearing.
“As you may recall, President Bola Ahmed Tinubu forwarded these bills to both chambers of the National Assembly on October 3, 2024, as part of his administration’s commitment to fiscal reforms and economic growth.’
‘’Today’s (yesterday) public hearing is an important step in that process, ensuring that we gather diverse perspectives from all stakeholders before these bills are finalised. These reforms are not just about taxation, they are about building a fairer, more efficient, and growth-oriented tax system that supports businesses, encourages investment, and ultimately improves the lives of Nigerians.
‘’Many of our existing tax laws are outdated and no longer reflect modern economic realities. Amending these arcane legislations is both necessary and urgent to create a tax framework that is transparent, predictable and conducive to economic development.
“We acknowledge concerns about marginalization, disproportionate sharing, and possible biases in tax administration and revenue allocation. However, I assure you that this process will be thorough, inclusive, and guided by the national interest.
‘’Our goal is to develop a tax framework that promotes economic prosperity, encourages investment, and strengthens Nigeria’s fiscal sustainability.
“A fair, transparent, and efficient tax system is fundamental to economic growth and national development.
These bills seek to update outdated tax laws to reflect current economic realities and global best practices; enhance revenue generation and collection through a more effective and accountable framework, streamline tax administration to make compliance easier for businesses and individuals.
“It is also to ensure equity and fairness, preventing excessive taxation and ensuring a level playing field for all sectors of the economy.
“As we deliberate, let me emphasize that transparency, fairness, and inclusivity will be our guiding principles and ultimately improves the lives of Nigerians. Many of our existing tax laws are outdated and no longer reflect modern economic realities.”
We’re happy with reforms bills — Kyari
In his submission, the Group Chief Executive Officer of NNPCL, Mele Kyari, who noted that the entire oil and gas industry was happy with the bills, said: “We are the happiest people to see this tax law coming into place, bringing every education in one basket, bringing in a significant number of reforms that will bring simplicity to the tax system and the tax laws in our county. “I want to tell you, making our business more profitable, we have a plan to keep our industry as strong as possible, multiple tax systems, multiple tax rules.’’
Also speaking, the Chairman of Revenue Mobilisation and Fiscal Allocation Commission, RMFAC, Dr Mohammed Shehu, said the commission was in support of the bills 100 per cent, adding that the bills would enhance stability in the economy.
While asking the Senate Committee on Finance to address the area of bad distribution to sub-nationals, Shehu said: “I hope this bill will address the issue of endless reconciliation with NNPC.”
On his part, the convener, Arewa Think Thank, Muhammad Yakubu, explained that the group was one of the groups that saw the benefits of the bills.
He said: “We had analysed the benefits of the bills and made our position known and we have submitted it. The perception that the North is against the bill is not true. And please, some of these views that are very very important to the country should not be put aside.’’
The representative of the Supreme Council for Sharia in Nigeria, Ahmad Dogarawa, said it was the view of the council that the Nigerian tax system was, indeed, in need of reform.
He said: We, therefore, commend the government for its genuine efforts to reform our tax system.
However, the council wishes to bring the attention of the National Assembly to the following concerns of the specific sections of particularly the Nigerian tax bill and the Nigerian tax administration bill.
‘’We have suggested that the Value Added Tax, VAT, be reviewed to five per cent or maintain the present 7.5 per cent.’’
People evade tax where govt is unaccountable — NLC
Reacting Nigeria Labour Congress, NLC, said a government that was unaccountable to the people should not expect the citizenry to take the issue of contributing their hard earned resources to such profligate government.
An official of NLC who spoke on condition of anonymity, insisted that “citizens can only pursue the civic duty of paying their taxes when they see a connection between their survival and businesses on the positive actions of government.”
He said: “Akpabio, like many politicians, talks before he thinks. With the huge revenue accruing from oil and other natural resources, there has been nothing to show for it, except that government officials live flamboyantly at the expense of Nigerian people.
‘’A government that is unaccountable does not expect the citizenry to take the issue of contributing their hard earned resources.
“You cannot tax poverty but wealth. If a government does not contribute or provide the enabling environment for Nigerians to thrive and create wealth, how would they be confident in contributing to the state?
‘’Citizens can only pursue the civic duty of paying their taxes when they see a connection between their survival and businesses on the positive actions of government, rather than a situation where people like Akpabio feather their nests with purchases of hundreds of millions worth of SUVs and take home humongous allowances while the masses wallow in penury.
“The truth is that it is only the poor workers who pay their taxes dutifully every month. The rich evade taxes and when you look at what they are proposing as tax bills again, they are planning to tax the poor workers to death.
“Government must govern properly and effectively to propel people to create wealth which can then be taxed. If the people do not feel confident and connected to the government, they will not be motivated to pay tax.”
Name Nigerians evading tax payment, TUC challenges Akpabio
Deputy President of the Trade Union Congress of Nigeria, TUC, Dr Tommy Okon, said: “We do not know where he got his facts from, in a country where there are dearth of data. If what he is saying is true, how come the Federal Inland Revenue Service, FIRS, always surpassed its set target? ‘’This government has taxed the masses enough, and it is even the wealthy few that evade payment of tax, not the workers whose taxes are deducted from source.
“He should come out openly to mention specifically those groups of Nigerians who have been evading tax payment, instead of generalizing it with an unverifiable percentage. We are very sure that when they were campaigning for election, the issue of taxation was not a condition precedent for good governance.
“Honestly, such statements should not have emanated from the legislative arms of government, whose major role is to make laws for good governance.”
Blame govt for tax evasion — NECA
On its part, the Nigeria Employers’ Consultative Association, NECA, said government had been culpable in giving the citizens reasons not to pay tax.
Speaking through its Director-General, Adewale-Smatt Oyerinde, NECA said: “ It is not far from the truth that the majority of Nigerians don’t pay tax. While this is quite unfortunate, the government too has been culpable in giving the citizens many reasons not to pay, especially as the benefits of the taxes collected are not seen by many. “While we align with the new tax reforms and the need to improve tax collection efficiency, there must also be a mechanism to make government accountable for the taxes collected.”(Vanguard)
