Dr. Usman Bugaje, renowned scholar, political Activist, and former federal lawmaker, says Tinubu’s tax reform bill should be “put in the dustbin”, accused the President of acting like a monarch.
In an interview conducted on Thursday with Arise TV, Dr. Bugaje expressed concerns that the proposed bill is inconsistent with Nigeria’s economic conditions and may exacerbate hardship and insecurity. On October 3, 2024, President Tinubu submitted four tax reform bills to the National Assembly, which faced significant opposition, particularly from legislators in the Northern region.
Under the current tax legislation, states typically adhere to a sharing ratio of 50:30:20—50 percent for equality, 30 percent for population, and 20 percent for derivation. Should the bill pass through the National Assembly, the proposed sharing ratio would shift to 20:20:60, allocating funds based on equality, population, and derivation, respectively.
The new bill specifies that, regardless of any other legal formulas, the net revenue generated under Chapter Six of the Nigeria Tax Act will be allocated as follows: (a) 10 percent to the Federal Government; (b) 55 percent to State Governments and the Federal Capital Territory; and (c) 35 percent to Local Governments. Furthermore, it stipulates that 60 percent of the funds allocated to states and local governments will be distributed based on derivation.
Dr. Bugaje remarked, “The governors have opposed this, and taxation falls under the concurrent legislative list. The president asserts that this is sacrosanct. Sacrosanct in what way? A bill presented to the National Assembly must undergo the standard legislative process, yet the president appears to be acting in a manner reminiscent of a monarch.”
In the constitution of the Federal Republic of Nigeria, the structure of government is clearly delineated, with the National Assembly positioned as the foremost entity, followed by the executive branch. It raises a question as to how a president can regard a bill presented to the National Assembly as inviolable.
Bugaje expressed concerns regarding the Presidential Tax Reform Committee, chaired by tax expert Taiwo Oyedele, indicating that the committee lacks a comprehensive understanding of the nation’s economic and regional complexities.
“I have had discussions with Mr. Taiwo, who is at the helm of the team responsible for drafting the extensive 300-page tax reform bill. It seems evident that this team does not grasp the societal context for which this policy is intended.
“This situation appears to reflect the perspective of professionals based in Lagos and Abuja, who may be unaware of the implications of their proposals.
“While the bill attempts to alleviate some burdens for struggling citizens, it simultaneously introduces significant disparities among the states. Moreover, it fails to clarify critical issues such as attribution and derivation, which are among the most contentious topics.
He warned that the ambiguity surrounding these matters is likely to lead to further rejection of the bill.
“My view is that the Tax Reform Bill should be entirely discarded, and a new process should be initiated. I recognize the importance of tax reforms; we must expand the tax base, ensuring that more individuals contribute.
“There are several issues that also require attention.” he added.
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