Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, defended the committee’s proposed tax reform bills against criticism and allegations of inadequate consultation on interview on Arise Tv “ThisDay Live,”....CLICK HERE TO READ THE FULL ARTICLE➤
The bills, currently before the National Assembly, have faced opposition particularly regarding their Value Added Tax (VAT) provisions. Oyedele emphasized that the reforms aim to correct existing inequities in the VAT collection and distribution system, rather than create new problems as critics suggest.
“We’re saying today Lagos state is getting the benefit for calls made in Kano, in Kwara, in Abuja, and we’re trying to change that,” Oyedele explained, addressing concerns about revenue distribution. The proposed reforms would ensure VAT is attributed to states where consumption actually occurs, rather than where companies’ headquarters are located.
According to Oyedele, the committee, established on August 8, 2023, comprised over 120 members drawn from across Nigeria’s geopolitical zones. The membership included representatives from more than 20 government institutions, private sector stakeholders from manufacturing and women-led businesses, and 45 students from 22 universities across the country. Given the extensive scope of work that would typically require about four years to complete, the committee adopted a structured approach to meet urgent timelines. “We knew that Nigeria does not have that luxury of time because we need to relieve the pain very quickly and set Nigeria on the right path to development,” Oyedele explained.
However, Oyedele acknowledged challenges in securing meetings with state governors. Despite attempts to meet with six governors representing each geopolitical zone, only the Lagos State governor granted an audience, while Kaduna State’s deputy governor hosted the committee. The Nigeria Governors’ Forum repeatedly postponed meetings, eventually offering only a 15-minute slot. Particularly striking was the committee’s experience with the Nigeria Governors’ Forum (NGF). According to Oyedele, the Forum canceled four consecutive scheduled meetings. On the fifth attempt, the committee faced an unusual situation: “The fifth time we were kept waiting till 1:30 a.m. middle of the night. By the time they had time for us, they say we had 15 minutes.”
Even during that brief midnight meeting, the governors’ focus was narrow. “They said ‘tell us how your our revenues will go up.’ Even that we couldn’t say in 15 minutes,” Oyedele recounted, highlighting the challenges of discussing complex tax reforms in such a limited timeframe.
Addressing allegations of bypassing committee members in drafting the final recommendations, Oyedele strongly denied any underhand tactics. “Nothing like that happened,” he stated, challenging critics to name any committee members who claimed they were sidelined. He emphasized that the committee’s work was transparent and collaborative throughout the process.
The chairman also detailed the committee’s extensive stakeholder engagement efforts, including:
– A two-day retreat with the Senate, attended by most senators
– A shorter engagement session with the House of Representatives
– Multiple meetings with Internal Revenue Service heads from across Nigeria
– A half-day engagement with state finance commissioners
– Over 40 sector-specific consultations with groups ranging from manufacturers to fintech companies
These revelations come amid current controversy over the tax reform bills, with some governors now calling for the bills to be withdrawn for wider consultation. Addressing these calls, Oyedele expressed concern that withdrawing the bills might lead to further delays without guaranteeing meaningful engagement.
“My worry personally, and I’m not speaking for the president, is that if you withdraw the bills and you want to have this consultation, the consultation will still be frustrated, and you will not have the opportunity to return these bills to the National Assembly in the life of this government,” he cautioned.
The chairman noted that the governors’ earlier reluctance to engage preceded the current controversies surrounding the bills, stating, “The governors’ Forum were not unwilling to speak to us because of this controversy. All this happened even before this controversy happened.”
Despite these challenges, Oyedele emphasized that the committee managed to conduct extensive consultations with other stakeholders, including state finance commissioners and heads of internal revenue services from across Nigeria.
The chairman revealed that President Bola Tinubu remains committed to the reforms while being open to negotiations on specific provisions. “Mr. President’s view is that the issues identified can be fixed in five minutes. Why is the solution to that withdrawing the bill?” Oyedele stated, responding to calls for the bills to be withdrawn for further consultation.
Key features of the proposed reforms include:
– Allowing states to keep 60% of VAT generated within their territories
– Removing VAT from 82% of consumption items, including food, healthcare, education, and rent
– Adjusting VAT rates on non-essential items to compensate for revenue reduction
– Electronic money transfer levies to be allocated entirely to states
– Including taxation of Government Bonds to benefit states
The chairman also highlighted that the controversial aspects are limited to specific provisions within one of the four reform bills, arguing that disagreement over these sections shouldn’t halt the entire reform package. ...CLICK HERE TO READ THE FULL ARTICLE➤
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