The recent Tax Reform Bill initiated by President Bola Ahmed Tinubu may be currently going through various legislative processes of the National Assembly.
But to a large extent, the Bill is actually receiving a hyperfocuswithin different regional-mindsets; sniffing for any covered up intentions, exposing the strength and weaknesses of our unity, assessing the fair-component in our thinking, and above all, testing the boldness to embrace our national challenges.
Firstly, while some aspects of the Tax Reform Bill is largely appreciated for safeguarding the interest of the poor income earners and addressing incidences of multiple taxation; the other aspect which has to do with how the federal, states and local councils share the earnings from nationally generated Value Added Tax – VAT from goods and services in proportion to what is generated from the places of collection, has become a very contentious subject.
With some applauding the tax reform bill as a brazen attempt to address one of the critical issues upsetting the workability of how we are structured as a nation, highlighting reasons for stunted growth; others maintain, it is wrong-timing for our nation to be redressing an accustomed system, designed towards achieving economic and developmental balancing; where accruals from the high and low VAT generating States are merged and apportioned in a manner that portrays the high VAT generating States being made to sacrifice a substantial portion of their earnings in supporting the developmental strides of the low VAT generating States.
Notwithstanding, supporters of the Tax Reform Bill believe its emergence will strengthen the spirit of true federalism, spike productivity through competitiveness and create jobs that would lead to every component parts of the country, standing firm, without having to depend on another for bailout or support.
In spite of presumed loftiness of the above, those against the Bill are claiming that with more money currently coming into States and local governments’ coffers owing to increased allocation from the Federal Account Allocation Committee – FAAC; some State are still trudging in fulfilling their salary payment obligations in line with the demands of the newly increased minimum wage, sweeping across the country.
Also amongst the sundry issues advanced to counter the introduction of the Bill are the challenges of needed data physicalization to accurately determine geographical sources of VAT collections. Another downside being expressed is the possibility of scrapping such agencies like Tertiary Education Trust Fund – TETFUND, National Agency for Science and Engineering Infrastructure – NASENI, and the National Information Technology Development Agency – NITDA which primary source of funding rests on accruals from VAT.
Furthermore, the naysayers to the Tax Reform Bill are also holding claim to the imbalance existing as a result of disparity in the location of federal government assets, placing the States with more federal government assets in a more advantageous position to generate higher VAT than others. Therefore, it is expected that such benefitting States from federal assets and activities should make needed sacrifices to bridge the gaps experienced in places lacking such federal government assets.
And then, the sublime matter that is rather kept outside of public discourse. While initiating the Tax Reform Bill, the federal government thought it wise to make the necessary sacrifice by proposing a reduction of its share of VAT earnings from 15% to 10%as well as conceding 55% to States and 35% to local government councils.
Expectedly, this proposal should be enticing enough, but not so to the minds already set with the notion that the federal seat of power, also belongs to them. For such, it appears more like shortchanging them from the federal and regional sides; amounting to a loss in the allocation of what surreptitiously belongs to them.
Interestingly, this sectional interest laying claims to ownership of the federal seat of power has started grouping to reclaim ‘their’ seat of power in the next 2027 presidential election. And with the current poor-credit rating of the Independent National Electoral Commission – INEC, it is only hoped it does not become an established source of fostering unpopular will, which continues to harm our national growth.
Right now, the controversy stirred up by the introduction of the Tax Reform Bill is largely considered as the first real troubled path between President Tinubu and the legislative arm of government; which has always offered the president tacit support to carry on with perceived audacious policies and actions, amongst which is the sudden removal of the fuel subsidy.
All over the world, enduring and acceptable governments are built on trust and the belief that those saddled with the business ofgovernance are able to see clearly, think deeply and accurately to produce visible desirable outcomes. Where such capacities and outcomes are not consistent and tangible, it becomes difficult for thepeople to keep hinging their prospects and collective destiny on fatuous hope.
The understanding of most Nigerians is that the current ruling political party –APC was formed and nurtured from the wave of people’s anger and resentment, fueled by unabating corruption, high cost of living, pervading insecurity, vast unemployment, low productivity which were noticed in past regimes.
However, what the APC has done with time and their given mandate can rightly be described as the worsening of the situation it met on ground. Even more regrettable is the unison with which the stakeholders in the APC keep proclaiming to be the harbinger of a far from being experienced relief; therefore, it is observed that the citizens have become reprehensive about the cohort that prefers to speak untruly of actuality, instead of adopting a modest path of self-appraisal, leading to internal cleansing of personnel and methods.
To such end, a lot of Nigerians are now seeing the Tax Reform Bill as a subject akin to ‘shaking the table’ of the APC with the hope of jolting some senses into realizing their promise of a renewed hope. After all, earlier in the life of the current regime, Tinubu was quoted to have said, “Our journey, begins now! Together we shall renew hope” Could this be the actual beginning?
Former Argentine’s president, Mauricio Macri, South Africa’s Jacob Zuwa, Peru’s Martin Vizcarra, Angola’s Jose Eduardo dos Santos and Malaysia’s Mahathir Mohamad are a few world leaders, who the instrumentality of populism shot to political prominence like Bola Tinubu (before becoming the president of Nigeria) but none of these leaders could sustain the momentum of overwhelming acceptance as a result of failings in the demands of sustained populism.
Quite frankly, Tinubu’s tenacity or boldness are not in doubt. So far, he is not known to bow to pressures against his believes. But right now, will he be bold enough to stick to what he believes are the lofty deliverables from the proposed Tax Reforms Bill?
Polity has a way of launching any world leader into exit path when faced with the failure to drive perceived important policy to a successful destination; and in this case, president Tinubu appears to be driving his Tax Reform Bill against a hostile, non-compromising power bloc within his APC.
Kingsley Ogbeide Ihama(mustardaffairs@yahoo.com)
Gatekeepers News is not liable for opinions expressed in this article; they’re strictly the writer’s
