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Kano Govt, Customs Raise Concern Over Sections In Tax Reform Bills

Published

4 hours ago

February 26, 2025

Gloria Ikibah

…as TUC, others oppose increase in VAT, reduced funding for TETfund, NASENI, NITDA

…as NLNG advocate Zero-rate VAT for export

By Gloria Ikibah

The Kano State Government has raised concerns over sections of the proposed tax reform bills that extend the Federal Government’s control over state and local tax agencies.

The Permanent Secretary in the Office of the Secretary to the State Government, Umar Mohammed Jalo, stated the government’s position, at a 3-day public hearing organised by the House of Representatives Committee on Finance on Wednesday in Abuja.

Jalo urged the House Committee to amend the bill by eliminating provisions that place it above other laws.

On the proposed reduction in the funding of key national agencies, like the Tertiary Education Trust Fund (TETFUND), Nigeria Information Development Agency (NITDA), and National Agency for Science and Engineering Infrastructure (NASENI), that are critical to the nation’s education, technology, and engineering sectors.

He said :”This clause is objectionable as it grants this bill a constitutional status similar to military rule, which cannot withstand the scrutiny of constitutional validity. The supremacy provision should be deleted.

“These provisions are substantially in breach of the Constitution of the Federal Republic of Nigeria, 1999, as the National Assembly lacks the competence to legislate on matters exclusively affecting state and local governments.

“Reducing funding to these strategic agencies will affect national interests in education, engineering, and information technology in adverse ways. TETFUND, NITDA and NASENI should continue to be funded to support the nation’s aspirations for technological advancement, prosperity, and sustainable development.”

Jalo also also expressed concerns over the planned increase in Value-Added Tax (VAT) from 7.5% to 15% by 2030, warning that such a move would worsen the hardship faced by Nigerians amid the rising cost of living. The government cautioned that higher VAT rates would further strain households and deepen economic difficulties.

As an alternative, the Kano State Government advocated for improved tax collection mechanisms rather than raising VAT.

“There is significant potential to enhance tax coverage and collection efficiency, as weak compliance remains a major challenge,” he noted.

While supporting the need for fiscal reforms, the government emphasized key concerns regarding the Federal Government’s ongoing tax restructuring. It also underscored the urgency of expanding Nigeria’s revenue base, stating that current public earnings—around 10% of GDP—are inadequate to meet the country’s growing development needs.

“The fiscal space needs to be enlarged,” the government noted. “Public revenues at approximately 10% of GDP are currently too small relative to the daunting challenges of development.

“A more auspicious fiscal space will provide tremendous opportunities for the governors to deliver on their promises, including achieving the Sustainable Development Goals (SDGs), reducing poverty, and rebuilding infrastructure for growth, wealth, and job creation.”

The Kano government welcomed the Federal Government’s efforts to reform the tax system, which they described as “long overdue,” and acknowledged that the current tax regime is overly complex and riddled with inefficiencies. “Despite past reforms, tax administration remains weak and plagued by inefficiency, poor governance, and corruption. Tax avoidance and evasion are prevalent and must be addressed.”

The state further praised the proposed harmonization of Nigeria’s multiple tax laws, stating, “Harmonisation will enhance clarity, compliance, and administrative efficiency. It will also ensure legislative cohesion and policy coherence.”

However, the government expressed strong reservations about the manner in which the reforms were being rushed through the National Assembly without sufficient stakeholder consultation. “The bills were apparently introduced with the utmost haste and without exhaustive stakeholder engagement,” the government stated.

“For any reform to be successful, social dialogue and effective communication are critical. The federal government should learn to consult more, to harvest ideas and diverse perspectives from its citizens.”

Kano also criticised the federal government’s failure to adequately communicate the potential benefits and costs of the reforms, and the vilification of Northern governors who opposed certain provisions of the bills.

“Northern State Governors who voiced their opposition to certain provisions of the bills were vilified and accused of ‘backward thinking’ and ‘parasitism.’ Citizens’ opposition to reforms must be addressed with civility, tact and diplomacy.”

The Comptroller General of the Nigeria Customs Service, Adewale Adeniyi in his submission on the bill, said its purpose was to make Nigeria more business-friendly and competitive but raised concerns about potential jurisdictional conflicts.

The Customs Boss argued that while tax is a vital revenue-generating tool, customs duties go beyond fiscal policy to promote industrialization, prevent environmental pollution, and uphold public health.

He said :”Our concerns are laid out in a 17-page document, but key areas of conflict include Section 23, 29, and 41A of the Joint Revenue Bill,” said the representative. They pointed out that Section 162 of the bill essentially “legislates the Nigerian Customs Service out of existence.

“The UK experience is instructive,” the representative continued, referencing the 2005 merger of customs and tax functions in the UK, which was later reversed due to operational inefficiencies. “In 2012, the UK separated border control functions, acknowledging the distinct nature of customs operations.”

He cited examples from African countries like Uganda and Ghana, where customs and tax authority integration initially resulted in higher tax-to-GDP ratios but later caused inefficiencies and operational complexities.

“With success stories like Morocco’s customs modernization, which increased revenue by 37% and reduced clearance times by 65%, Nigeria’s Customs Service argued for preserving its autonomy. In fact, the NCS noted that since the enactment of the NCS Act in 2023, Nigerian customs revenue had surged by 92%, and trade facilitation had markedly improved.

“We should encourage collaboration between customs and tax authorities, not abolish customs or repeal an existing law”, Adeniyi added.

The Secretary General, of the Trade Union Congress, Comrade Nuhu Toro speaking rejected the gradual increase of Value Added Tax.

He said : “The gradual increment of VAT from the current 7.5% to 15%. Mr. Chairman and respected members, the TUC unequivocally rejects this proposition.

“Our reason is simple, allowing the VAT rate to remain at 7.5% is in the best interest of the nation. Increasing it would place an additional burden on Nigerians, many of whom are already struggling with their economic challenges and realities.

“At a time when inflation is on the rise, and unemployment is becoming an ever-growing concern, higher taxes will only further strain households and businesses alike. We must be mindful, Mr. Chairman, that such measures could slow down the economy.

Speaking for the Nigeria Liquified Natural Gas (NLNG), Manager Tax and Financial Systems, Clement Okoro Efeyita, said the organisation fully support the bill, and it will be of great benefit for the committee to consider making exports from Nigeria to be zero-rated on VAT.

According to Efeyita, “That way, exporters from Nigeria will be competitive globally. Another issue is we are of the view that agreements, contracts, that are already subject to the value-added tax rules should not be subject to value-added tax.

“In a way, it creates a form of double taxation if this area is not looked into. Mr. Chairman, we also would like to advocate with regards to the currently subsisting executive orders.

“Our view on it is simple. Most of the executive orders are tied to laws that will be repealed by the time the current bill is passed into law. Our view, which we seek for this committee to take into account, is to ensure that the provisions in those executive orders are fully reflected in the Nigerian tax field.

“That way, it will take away all forms of undignity. And it will also not create a situation where investors’ confidence in the country is in any way dampened”.

Still on the Nigerian tax bill Efeyita added: “It is with regards to the far out claim of capital arms. And our advocacy is very simple. Paragraph 21, subparagraph 1 of the first schedule of the Nigerian tax bill.

Our advocacy point is very simple and straightforward. We would like the bill, as currently drafted, to give full powers to taxpayers to be able to determine how they claim capital arms. Doing so will not in any way shortchange the government.

“But rather it will create a situation where the government is able to receive, in good time, taxes that are due. So our advocacy point is one of this.

“We would also like to draw your attention to the fact that by the time the Nigerian tax bill is passed into law, the Company Income Tax Act, among several other acts, will immediately be repealed.

“Mr. Chairman, I would like to draw your attention to section 23, subsection 1 of the Company Income Tax Act. And to mention that this particular provision has not been reflected in the Nigerian tax bill. And this provision, essentially, is one that will truly benefit the Nigerian state.

“It is a provision that grants a tax waiver to companies that bring in income they’ve earned abroad. Income types such as royalty, interest, and dividend. At this critical time of our economy, when we need foreign exchange inflow, should not be the time for such a critical provision that encourages taxpayers to bring in foreign currency they’ve earned abroad to be taken out of the proposed bill.

“But not to forget the fact that going to the Nigerian Tax Administration Bill at this point in time, there is also the new provision that will be found in section 12 and section 49 of the Nigerian Tax Administration Bill. There is a new provision that seeks to subject companies that produce LNG to a tax regime similar to what is obtainable upstream.

“Our point of advocacy is simple. A situation where the majority of companies that are subject to tax under the current company income tax regime are not equally being made to pay tax instrumentally over a 12-month period creates a kind of, permit my language, discrimination. It does not bring about equity and fairness.

“We are clearly advocating that all companies that are subject to the current company income tax act at 30% as is being reflected in the Nigerian Tax Bill correctly, should be made to pay taxes in similar manner. Mr. Chairman, committee members, these are the high points of restricting the macroeconomic standards of our nation. These laws, with their challenge, improve on the objectives as set out in section 16 of the 1999 Constitution as amended”, NLNG stated.

Related Topics:chairman Kano Military Nigeria Nigerian

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Billionaire Otedola Hosts Burna Boy, Wizkid, At Lagos Residence (Photos)

Published

25 seconds ago

February 26, 2025

Kayode Sanni-Arewa

By Kayode Sanni-Arewa

The Chairman of FBN Holdings, Femi Otedola, has hosted music icons Burna Boy and Wizkid at his Lagos residence.

Otedola disclosed this in a post on his X handle on Wednesday.

Sharing a photo from the gathering, Otedola described the meeting as a privilege, expressing admiration for the impact of Afrobeats on the global stage.

He wrote, “A true privilege to host some of our biggest music icons @wizkidayo @burnaboy at my Lagos home. Always inspiring to share ideas and celebrate the global movement that is Afrobeats …F.Ote”.

Reacting to the post, Netizens applauded the gathering, describing it as a gathering of talent and vision

An X user, Ken Giami, who tweets as #ken_giami, “An incredible gathering of talent and vision! Afrobeats continues to shape global culture, and it’s always inspiring to see icons like #wizkidayo and #burnaboy leading the movement. Here’s to more growth and global impact!

News

SAD! Billionaire Folorunso Alakija Reportedly Goes Blind

Published

6 minutes ago

February 26, 2025

Kayode Sanni-Arewa

By Kayode Sanni-Arewa

Nigerian billionaire businesswoman, Folorunso Alakija has reportedly lost her sight.

Sources told SaharaReporters that the 73-year-old founder and Executive Vice Chairman of Famfa Oil began experiencing health complications following a near air mishap.

She was travelling with her husband, Modupe Alakija, Chairman of Famfa Oil, when the incident caused a spike in her blood pressure, which allegedly affected her vision.

Following the distressing event, Alakija reportedly ordered a new jet to avoid flying with her husband. However, her vision continued to decline until she ultimately lost her sight.

She had a near air mishap with her husband on board, and her blood pressure reportedly shot up, affecting her eyes,” a source revealed.

“She has been having eyesight issues, but instead of treating the illness, she chose to start a church to help her. Now she can’t see.”

Alakija, a businesswoman and philanthropist, started a small fellowship in her home around 2004, which later grew into the Rose of Sharon Glorious Ministry International. She was ordained as an Apostle on her 69th birthday.

As the founder of Famfa Oil, she holds a significant stake in OML 127, a highly lucrative oil block located in Nigeria’s Agbami deepwater oilfield.

According to Forbes, Alakija’s net worth was estimated at $1 billion as of 2020. In 2015, she was ranked 87th on Forbes’ list of the world’s most powerful women and was one of only two African women on Forbes’ list of the richest people in Africa.

SAHARA REPORTERS

News

Police Halt Attempt To Invade Kano Emir’s Palace, Nab 17 Suspects

Published

10 minutes ago

February 26, 2025

Kayode Sanni-Arewa

By Kayode Sanni-Arewa

Operatives of the Kano State Police Command have halted a planned takeover of the Nassarawa Palace, home to the 15th Emir of Kano, Aminu Ado Bayero.

The police confirmed that 17 suspected thugs were arrested in connection with the alleged plot to storm the palace and forcefully remove the Emir.

Speaking on the development, the Police Public Relations Officer (PPRO), SP Abdullahi Haruna Kiyawa, said that the command acted on credible intelligence and swiftly took proactive security measures to prevent any breakdown of law and order.

“Following credible intelligence reports of a planned violent protest by some individuals, the Command, in collaboration with other security agencies, has deployed personnel and assets to strategic locations within Kano metropolis to prevent the protest and ensure public safety,” Kiyawa stated.

He added that 17 suspects had been arrested, and an investigation into the incident was ongoing to determine the masterminds behind the attempted siege.

The police further warned individuals and groups against engaging in any unlawful gathering, procession, or violent activities, stressing that security forces would respond decisively to any attempts to disrupt peace in the state.

“We urge the public to remain vigilant and report any suspicious activities to the security agencies. The Command appreciates the cooperation and support of the good people of Kano State in our efforts to maintain peace and order,” Kiyawa added.