We Consulted Northern Governors On Tax Reform- Oyedele
2 years ago 3 min read
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The Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has said that Northern governors can not deny that they were not consulted by the committee on the controversial Tax Reform Bill.
Oyedele said this during the Town Hall on Tax Reform Bills organised by Channels TV.
The tax expert made the comment following disapproval of the Value Added Tax component of the reform by Northern elites.
The Northern elites including governors and lawmakers are opposing the bill, citing it short changed the North and favours Lagos State. Senator Ali Ndume and, most recently, the Governor of Borno State, Babagana Umara Zulum are among the critics of the bill.
The Nigeria Tax Administration Bill under Section 77, proposes a reduction of VAT distributable to the federal government from 15 per cent to 10 per cent. The bill also concedes 55 per cent to state governments and 35 per cent to the local government councils.
On sharing modality, it recommends that 60 per cent shall be distributed on the basis of derivation consistent with Section 22(12) of the Bill.
The new VAT provision aims to redistribute VAT based on consumption metrics.
In defence, Oyedele said, “This is not rushing at all. We consulted. We had one session with the governors forum. They won’t say we didn’t consult them. They’re saying we need to consult more, which we agree with. Because since then, we never end. Even after passing the bills, we must continue to consult.
“We had two sessions with the National Economic Council. We had almost a whole day with the finance commissioners from all over Nigeria. We’ve had at least four sessions with the head of the internal revenue service from all the 36 states plus the FCT.
“We’ve reached out to six geopolitical zones. We identified one governor per zone to go and meet them where they are with their cabinet and discuss. We did some of that.
“Some of them did not have time for us. We work for more than six months. We always welcome opportunities to engage, but it is not correct to say that we did not consult.”
On the establishment of the Nigeria Revenue Service by repealing the Federal Inland Revenue Service (FIRS) Act and empowering the new establishment as the only revenue collector, Oyedele said it is designed for effective revenue collection.
He said, “In fact, the entire revenue we are collecting in Nigeria today is less than 20 per cent of what South Africa revenue service is collecting. We do not lack capacity in Nigeria.
“We are not introducing new taxes. So the clear answer to your question is, we have not recommended, we have no such powers, it was not within our mandate, the scrapping of any agency.
“So this is never about an individual, it’s about the institution. And if you look around the world, start from Africa, Ghana revenue authority, Canada revenue service, South African revenue service, go outside Nigeria, HM Revenue & Customs (HMRC), in fact, in many countries, those revenue agencies collect social security.
“If you go to Rwanda, and you want to do your driver license, is the revenue authority that collected, why? Because they have been set up to collect revenue. So they have the system, they have the structure, they have the training, they have the experience, they have the capacity.
“What we are doing in Nigeria is, at the federal government level, we have over 60 agencies of government with revenue targets. First, they’re distracted from their primary mandate, many of them forget why they were set up, and they are chasing revenue to the detriment of the economy.”
