New Tax Reforms'll Provide Stronger Social Safety Net- Nwoko

Ismail Abdulaziz
Dec, Wed, 2024

General News

New tax reforms’ll provide stronger social safety net- Nwoko

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By Deborah Coker

Sen. Ned Nwoko (PDP-Delta) has said that the four new tax reform bills presently before the National Assembly would provide a stronger safety net for Nigerians.

Nwoko, who is representing Delta North Senatorial District and a member of the Senate Committee on Constitutional Amendment as well as Finance, said this while speaking with the News Agency of Nigeria (NAN), in Abuja on Wednesday.

He said this was particularly so, if the presidency adopted his proposed model for National Social Security Agency.

According to him, Nigeria’s tax system has long been due for reform, and the four bills currently before the National Assembly, offers us a critical opportunity to address the deep-rooted fiscal challenges we face.

“Nigeria, with one of the lowest tax-to-GDP ratios in the world, our revenue framework is not fit to support a population of more than 220 million people.

“Importantly, this overhaul can also provide a stronger social safety net, particularly if the presidency adopts my proposed model for a National Social Security Agency.

“I proposed contributions from taxes and the private sector as part of sustainable funding mechanisms for the Agency.

“However, for this promise to be realised, we must pair reform with strong accountability mechanisms and a commitment to effective implementation.

“This is not just about raising taxes; it’s about making them work better for everyone. Nigeria cannot afford to keep postponing these tough but necessary decisions.”

The lawmaker also said that it was not taxation that was the problem, but how the revenues were utilised for the benefit of the people.

He added that the concerns raised in opposition were not unique to Nigeria.

“Countries that have successfully implemented tax reforms, faced initial challenges but ultimately created systems that are fairer.

“The principle of progressive taxation is central to the success of these reforms, which is protecting small businesses and low-income earners while ensuring that those with higher incomes contribute proportionately,” he said.

NAN reports that the Senate on Nov. 28, passed for second reading, the tax reform bills forwarded to it by President Bola Tinubu in October.

The bill was thereafter referred to the Committee on Finance, which was asked to revert within six weeks.

NAN also reports that Tinubu on Tuesday, directed the Ministry of Justice to work closely with the National Assembly to address the concerns within and outside the legislature.

The Minister of Information and National Orientation, Mohammed Idris, revealed this in a statement he signed Tuesday titled ‘President Tinubu committed to accountability on tax bills, directs Ministry of Justice to work with NASS on concerns.’

Mohammed said, “In line with the established legislative procedure, the Federal Government welcomes meaningful inputs that can address whatever grey areas there may be in the bill.

“In this vein, President Tinubu has already directed the Federal Ministry of Justice and relevant officials who worked on the drafts to work closely with the National Assembly to ensure that all genuine concerns have been addressed before the bills are passed.”

The Federal Government says the bills are aimed at overhauling the nation’s tax system.

These are the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.

The federal government said that the proposed legislation seeks to consolidate existing tax laws, establish clearer frameworks for tax administration, and create bodies like the Tax Appeal Tribunal and the Office of the Tax Ombudsman.

However, critics argue that the reforms could disrupt the balance of fiscal federalism, potentially centralising tax authority and diminishing state revenues.

Notably, at a meeting on Oct. 28, the 19 Northern States, under the platform of the Northern Governors’ Forum, rejected the new derivation-based model for Value-Added Tax distribution in the tax reform bills.

They argued that the changes might adversely affect their regions’ financial autonomy. (NAN)(www.nannews.ng)

edited by Sadiya Hamza

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