*Warn Northern NASS members on consequences
By JACOB ONJEWU DICKSON
Rising from a town hall meeting in Kaduna on Thursday January 9, 2025, 134 civil society organisations have while totally rejecting the proposed Tax Reform Bill, describing it as a bad omen, which if allowed, will further impoverish Northern Nigeria.
The town hall meeting which attracted leaders of the 134 groups, warned that if the controversial bill is not thrown into the water basket, there will be dire consequences, which may include causing instability in the country.
According to the communique signed by Comrade Muhammed Sanusi Ali on behalf of the 134 Kaduna Based CSOs/NGOs, the town hall brought together a cross-section of policymakers, academics, civil society actors, community leaders, youth groups, and concerned citizens to deliberate on the implications of the proposed tax reform bills.
“Participants expressed profound concerns over the potential socioeconomic consequences of the reforms, highlighting the heavy burden they may impose on already struggling citizens and businesses in the region,” it said.
While noting that the notion of tax is not new to any of them, being the price paid for living in a civilized society, they however, argued that, “the framework within which we gather and utilize these resources is what determines whether tax becomes a catalyst for economic growth or a burden on our people but the proposed Tax Reform Bills have faced opposition from various stakeholders, including the National Economic Council, the Northern Governors’ Forum, South East Caucus of the Senate, Religious leaders, NGOs, CSOs, the Academic Staff Union of Universities (ASUU) and many more.
“Their primary concern revolves around the proposed amendment to the Value Added Tax (VAT) distribution formula, defunding of NITDA, TETFUND and NASENI. The bills lack clear definition of some key terms such as ‘derivation, family wealth, ecclesiastic’.
“The current system allocates VAT revenue based on the location of the company’s headquarters and tax office, rather than where the goods and services are consumed. In addition to the VAT distribution criteria, other concerns raised include the potential negative impact of the tax reforms on the region’s economy, education, digital innovation and the well-being of its people,” the communique said.
The groups explained that the current system allocates VAT revenue based on the location of the company’s headquarters and tax office, rather than where the goods and services are consumed.
“In addition to the VAT distribution criteria, other concerns raised include the potential negative impact of the tax reforms on the region’s economy, education, digital innovation and the well-being of its people.
“It was argued that the reforms could lead to increased tax burdens on businesses and individuals, hindering economic growth and development. The opposition to the tax reform bills has led to calls for broader consultations and consensus-building among stakeholders.
“The town hall therefore, concluded even within the government there was no consensus and consultations on the bills which is why, by failure to reverse the decision, it was considered that either the president lacks human feelings or he is determined to his seat to promote his personal / business at the expense of the lives of the populace.
” Almost unanimously, the speakers and participants rejected the tax reform bills, emphasizing that they do not reflect the realities of the people and could increase poverty, unemployment, weaken our educational institution and economic hardship.
“The town hall called for the immediate withdrawal of the proposed bills and urged the Federal Government to adopt a more inclusive and people-centered approach to economic reforms.
” It also called on all lawmakers from the North to turn down the bill that is apparently rejected by their constituents,” the communique said.
It explained that in the observations/deliberations at the town hall meeting, made regarding the proposed tax reform bills, participants observed that the proposed tax reform bills, far from being catalysts for economic growth, would increase the existing economic challenges facing the North and Nigeria as a whole.
“The reforms are likely to deepen poverty, increase unemployment, and stifle local businesses already grappling with economic hardship.
“The town hall meeting noted with great concern the provisions in the bills that propose the defunding of pivotal national institutions such as the Tertiary Education Trust Fund (TETFUND), the National Information Technology Development Agency (NITDA), and the National Agency for Science and Engineering Infrastructure (NASENI).
“These institutions are critical to education, innovation, and technological advancement, particularly in Northern Nigeria, and their defunding would undermine regional and national development.
“It was observed that the reforms appear to disproportionately target Northern Nigeria, raising suspicions about their intent. The region, already lagging in economic development, would bear a significant share of the economic burden, further marginalizing its population.
“The participants criticized the lack of meaningful consultation and engagement with stakeholders, particularly those from Northern Nigeria, during the formulation of the bills.
“This exclusion has resulted in policies that fail to reflect the realities and needs of the majority of Nigerians.The participants warned that the implementation of such reforms could fuel discontent and add to social tensions, particularly in the North, where citizens are already facing severe economic and security challenges.
“The overwhelming majority of participants unequivocally rejected the tax reform bills, viewing them as a direct assault on the economic and social well-being of Nigerians, particularly in Northern Nigeria.
“The town hall meeting emphasized the need for alternative reforms that are inclusive, equitable, and designed to stimulate sustainable economic growth without imposing undue hardship on citizens.
These deliberations underscore the collective sentiment that the proposed tax reform bills, in their current form, are detrimental to the people and the nation at large,” the communique said.
The meeting therefore, recommended the relocation of bank and telecommunication companies’ headquarters to Abuja, being the federal capital territory.
” Abuja, as the Federal Capital of Nigeria, has historically been a peaceful and neutral territory free from ethnic or religious tensions. It is unjust for banks and Telecommunication companies to situate their headquarters in certain states and allow those states to disproportionately benefit at the expense of contributions from other regions when the Federal ministries of Finance, Information and Communications as well as parastatals like Nigeria Communication commission and Central Bank of Nigeria has their Head offices in Abuja.
“Therefore, the town hall recommends that all banks and Telecommunication companies to relocate their corporate headquarters to Abuja and remit their revenues directly to the Federal Government to ensure equitable distribution of benefits. All Northern Governors, business leaders, and organizations are urged to exclusively engage banks that comply with this recommendation in all financial transactions.Reopening of Land Borders:
“The continued closure of land borders has had a devastating impact on the economy and livelihoods of citizens, particularly in border communities. The town hall urges the Federal Government to reopen land borders immediately to ease economic hardship, promote trade, and reduce the burden on struggling Nigerians.Reduction of VAT to 3%:
“The Federal Government should halt the proposed VAT increases and instead reduce the current VAT rate to 3%. This reduction will provide relief to citizens and businesses while encouraging economic activity. Alternative revenue-generating strategies must be explored to avoid placing additional financial pressure on ordinary Nigerians.Rejection of Increased Telecommunication Tariffs:Any attempt by telecommunications companies to increase tariffs will be firmly opposed.
“The government and regulatory authorities must ensure that telecommunications remain affordable for all Nigerians, given its critical role in economic and social connectivity,” the communique said.
It said that the proposed tax reform bill is unanimously rejected due to its lack of inclusivity and potential negative impact on various regions and sectors.
“The reforms must undergo thorough consultation with all regions and key stakeholders, including civil society organizations, educational institutions, and local governments, to ensure a consensus-driven and equitable approach,” it added.
The groups argued that the proposed national fiscal policy may lead to an increased tax burden on citizens, particularly those in lower-income brackets.
“If not carefully calibrated, these changes could exacerbate existing inequalities and hinder economic mobility. Especially as Nigerians are still grappling with the dual effect of subsidy removal and unification of the exchange rates, which have made the prices of goods and services to rise in a disproportionate manner that has never been experienced in the country,” it pointed out.
It warned that if the reforms are perceived as unfair or overly burdensome, they could lead to widespread discontent and a loss of trust in government institutions.
“History has shown us that economic distress often fuels populist sentiments, which can destabilize societies and hinder progress.
“If you say that it is corporate organizations that will pay higher taxes and not individuals, where will you be when the companies will increase the prices of their goods and services factoring VAT? Do you have price control mechanism?. All these will further result into higher income inequality,” the communique said.
The groups said that, agencies such as TETFUND, NITDA, and NASENI are essential for Nigeria’s educational, technological, and industrial advancement, hence the town hall demanded an immediate halt to any plans to defund or restructure these institutions.
“Their funding and mandates should be strengthened to enhance their capacity to address critical challenges, including research, innovation, and capacity building, which are vital for sustainable national development.
“Additionally, the proposed NELFund must be discontinued as it risks indebting future generations with unsustainable revolving credit schemes,” they demanded.
They said that the tax reform bill contains ambiguous terms that need clarification to avoid misinterpretation.
“For instance, a precise definition of “derivation” must be provided to ensure equitable resource allocation.
“The term “family wealth” must be clearly defined to prevent undue taxation on family assets or inheritance.These recommendations aim to ensure fairness, transparency, and inclusivity in Nigeria’s economic and governance frameworks, while prioritizing the well-being and interests of all citizens, especially those in Northern Nigeria,” they demanded.
They cautioned that in a multi-religious society with weak state institutions like Nigeria, undertaking a structural reform, be it economic or otherwise, requires wide consultation with a view to getting the buy-in of the wider section of the society.
“This will not only lessen the difficulties associated with the implementation of the reform but also take the steam out of those who want to capitalize on our fault lines to raise unnecessary tension. Unfortunately, the government has not engaged widely in order to seek the cooperation of the major stakeholders in the country on this.
“This is also coming at a time citizens are still grappling with the effect of subsidy removal on fuel, electricity and the floatation of the naira.In view of the economic realities in the country, it will be more strategic for the Federal Government to give Nigerians some breathing space after fuel and electricity subsidy removal and floating of the naira, which have caused the skyrocketing of the prices of essential commodities, because Nigeria as a country is import dependent.
“As we stand at this crucial juncture, the Tax Reform Bill needs to be rejected in its entirety at this material time.The town hall meeting organized by the CNG Gombe Chapter, CSOs, and critical stakeholders provided a platform for robust deliberations on the theme: “Tax Reform Bills: A Catalyst for Economic Growth or a Burden on the People?”Participants unequivocally rejected the proposed tax reform bills and related policies that threaten to deepen economic hardship, marginalize regions, and undermine national unity.
“They emphasized the need for equitable, inclusive, and people-centered reforms that prioritize sustainable development and the well-being of all Nigerians.
“The town hall resolved to continue engaging with policymakers, mobilizing citizens, and advocating for the protection of critical institutions and economic fairness.
“It calls on the Federal Government to heed the collective voice of the people and take urgent steps to address these pressing concerns.
“The participants reaffirm their commitment to promoting justice, equity, and accountability in governance while ensuring the socioeconomic stability and progress of Northern Nigeria and the nation as a whole.”
