The Ulama Forum of Nigeria made up of Islamic clerics has called for the withdrawal of the new tax Reform Bills submitted to the National Assembly by president Bola Tinubu, saying in the interest of justice and fair play, the Bills should be to wider discourse and national consensus
The Forum made the call in a statement titled “The Stand of the Ulama Forum of Nigeria on the Proposed Tax Reform Bills before the National Assembly and released on Wednesday.
The statement was signed by the convener of the forum, Aminu Inuwa Muhammad; and secretary Basheer Adamu Aliyu, and endorsed by 25 Ulama. Said the Federal Government should listen to the recommendations of the National Economic Council (NEC) and the State Governors and accordingly address their concerns.
The forum noted that the contents of the bills point in the direction that it could be the 10 to 15-year Reform Agenda of the World Bank, to the detriment of our sovereign independence as a nation.
“These important Bills have not been subjected to sufficient public scrutiny and debate, and there seems to be a clandestine rush to impose them on the country, thus depriving the emergence of a national consensus,” the Forum said.
The Ulama while urging the state governors to hire experts to extensively x-ray the bill added that “the governors should demand for respite from any action to pass the Bills into law in their present form and content.”
The Forum observed that the bills had eliminated the existing multiple avenues of taxation by way of harmonising taxes that are similar in nature and intent, adding that the implications of the Nigeria Tax Bill (NTB), 2024 and the Nigeria Tax Administration Bill (NTAB), 2024 “is that states that provide residence to headquarters of firms that produce the VATable goods and services would be allocated a great percentage of the derivation share to the detriment of the states where the actual consumers of the goods and services reside.
“The provisions of the proposed Bills will favour not more than three states to the detriment of the other states of the federation and the FCT, thereby considerably diminishing their VAT allocation and consequently strangulating them economically.”
While saying the bills were untimely and insensitive, the Forum said it is disturbing with abhorrent dimension to TETFUND, NITDA and NASENI, warning that “the future of these agencies will patently be jeopardised through the proposed Development Levy distribution formula. The NTB proposes a gradual decrease in the funding of the agencies from 4% of assessable profit of the companies in 2025 and 2026 down to 2% in 2030, when they will be phased out, leaving only the Student Education Loan Fund to enjoy the 2%.
“If the three agencies are deprived of their existing source of funds and are made to stop benefitting from the proposed Development Levy, it is not likely that they would survive even if they are to be funded through the mainstream Federal Government’s budgetary allocation.
“ Another obnoxious feature of the proposed Development Levy is that as TETFUND is being gradually stifled; public tertiary educational institutions will need alternative sources of funding infrastructure, research and staff capacity building.
“This will force them to charge exorbitant tuition fees, making students to be increasingly indebted under the Student Loan Scheme, thereby stealthily justifying the wide suspicion of the plan to fully privatise tertiary education.”
The Forum also said the bills had created inequality in Nigeria while citing the NTAB which it said has transferred the largest share of Value Added Tax (VAT) revenue from the areas of consumption or generation to the locations of head offices of production entities.
“This is seen to violate the principles of equity and fairness, as production is worthless without consumption.
“VAT is a consumption tax; therefore, transferring the largest share of its revenue from areas of consumption or generation to location of head offices of production entities violates the main objective of Fiscal Equalization, and promotes wide income disparity with its inherent risk of social disharmony.
“It is unjust because the overburdened local taxpayer will not equitably benefit from the tax he has paid, thereby nullifying a basic principle of state policy of balanced development as enshrined in the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
“The Ulama Forum in Nigeria believes that the proposed Bills leave much to be desired because of their clear lopsidedness and the uncertainties that shroud them.
“The country has of recent been drawn into a justified debate on the refusal of Mr. President to accept and act on the recommendation of the National Economic Council to withdraw the Tax Reform Bills before the National Assembly, for their unacceptable and lopsided provisions that do not bode well for fair dealing in the spirit of federalism.”
