N’Assembly resumes plenary, to accelerate tax reform bills

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N’Assembly resumes plenary, to accelerate tax reform bills

The National Assembly is set to resume plenary today, with plans to fast-track the passage of the tax reform bills.

After its first sitting of 2025 on January 14, both chambers adjourned until January 28 to allow committees to complete their work on defending the 2025 Appropriation Bill, which was presented by President Bola Tinubu on December 18, 2024.

However, the resumption was postponed to February 4 to give committees additional time to finalize their engagements with Ministries, Departments, and Agencies (MDAs) regarding the 2025 budget.

Before the holiday recess, the four tax reform bills introduced by President Tinubu on October 13, 2024, were a major focus. Lawmakers, particularly from the North, as well as northern governors and traditional leaders, had raised concerns that the bills could further impoverish the region and called for their withdrawal.

During the recess, the Nigerian Governors’ Forum (NGF) held discussions with the Presidential Committee on Tax Policy and Fiscal Reforms, the body behind the reforms, and a compromise was reached.

READ ALSO: National Assembly postpones resumption over budget defence

The governors endorsed the bills with some amendments, including a proposal to allocate 30% of Value Added Tax (VAT) revenue based on derivation, as opposed to the original 60%. They also recommended a revised VAT revenue sharing formula, with 50% distributed equally among states, and the remaining 20% based on population, to ensure a more equitable allocation.

Initially, one of the tax reform bills proposed a 60% VAT revenue share based on derivation, meaning states would receive funds according to the VAT generated within their borders. This led to significant opposition, particularly from northern governors and lawmakers.

Following the compromise, Governor Abdullahi Sule of Nasarawa State stated that the governors would now seek the support of their legislators to pass the bills in line with the agreed consensus.

Reports say various stakeholders, including some governors, are closely monitoring the progress of the bills in the National Assembly. A source close to one governor stated, “The communiqué issued by the governors represents their position, and they are hoping for mutual understanding from the legislators.”

Sources within the leadership of both the Senate and the House of Representatives have confirmed that the tax reform bills will receive expedited hearings as lawmakers reconvene today. However, it is expected that the House of Representatives will likely delay discussion on the bills until Wednesday, as Tuesday’s session is dedicated to a valedictory session for the late Deputy Chief Whip, Hon. Adewunmi Onanuga, who passed away on January 15 after a brief illness.

The Senate, which has already passed the bills for second reading, will continue to refine the legislation in line with the governors’ agreement. The Senate had earlier referred the bills to its finance committee, instructing it to hold public hearings within six weeks and report back.

In the House of Representatives, the debate on the tax reform bills had been suspended indefinitely due to opposition from 73 northern lawmakers. This was announced in a memo signed by the Clerk of the House, Dr. Yahaya Danzaria.

Lawmakers aim to pass the bills as soon as possible, with a target of completing the process by the end of March, according to one source.

Earlier in January, Taiwo Oyedele, Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, had indicated that the bills are expected to be passed into law within the first quarter of 2025. He also noted that the implementation of the reforms is scheduled to begin in July.

“We expect the tax reforms, particularly the tax reform bills, to be approved in 2025, ideally before the end of Q1, so we can notify taxpayers and prepare for implementation by July 1,” Oyedele said.

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