The Finance Act (amendment) Bill seeking incremental changes to Nigeria’s tax and fiscal law, which passed second reading on the floor of the Senate on Wednesday, may not be plain sailing to become a law as some senators have vowed to shoot down the bill.
Specifically, they said they would mobilise stakeholders to reject the bill during public hearing.
The majority of the legislators, who spoke in separate interviews with Akelicious on Friday, said the proposed tax hike would worsen Nigerians’ plight.
During plenary on Wednesday some senators raised points of objection to the bill, saying they were not given copies of the bill.
Unlike the usual legislative practice, copies of the lead debate read by the Senate Leader, Yahaya Abdullahi, were distributed to the lawmakers, but the details of the proposed bill were not attached to the document.
Attempts by senators to prevent the Leader of the Senate from going ahead with the lead debate pending the details attachment were frustrated by the Senate President Ahmad Lawan.
Using his power of the gavel, Lawan insisted that the general principles of the bill should be discussed without the details of the document.
This was despite their vehement protests that such action would not enable them to make informed contributions, which the second reading was meant to achieve.
Senators Yaroe Binus (Adamawa South) and Betty Apiafi (Rivers West) raised separate points of order to draw Lawan’s attention to the anomaly.
They argued that non-attachment of the amendments to the bill would not enable their colleagues to speak from an informed point of view.
The President of the Senate ruled both of them out of order, saying the details of the bill would only be made available, only to members of the Finance Committee.
Abdullahi led the debate following the insistence of Lawan that the bill should be considered even though the details were not made available.
According to him, the bill seeks to promote fiscal equity by mitigating instances of regressive taxation, reforming domestic laws to align with global best practices and introducing tax incentives for investments in infrastructure and capital markets.
He also said the bill would support small businesses in line with ongoing ease of doing business reform.
He said it would raise revenues for the government by various fiscal measures, including a proposal to increase the rate of Value Added Tax from 5 per cent to 7.5 per cent.
Senator Patrick Akinyelure, from Ondo Central, also noted that hike in VAT would not be necessary if the revenue collection agencies were effective in their operations.
He said, “There may not be a need for the review of the tax law seeking to increase VAT to 7.5 per cent if the revenue collection agencies are effectively discharging their functions.”
Speaking with our correspondent on the issue, a former Senate Leader, Ali Ndume, said he would never support any hike in VAT.
Ndume said the Communication Service Tax Bill, which has passed first reading, was aimed at replacing the proposed VAT hike.
He insisted that the majority of his colleagues in the Senate were not in favour of VAT increment.
He said, “Nobody wants any increment in VAT. Our people are already rejecting it claiming that it would lead to inflation and increase their burdens.
“They are saying the prices of goods and services will also increase.
“That is why I’m also opposed to it as a representative of my people, and decided to come up with legislation that will increase the revenue base of the country without much impact on the masses.
“The Communication Service Tax Bill is the alternative we are proposing and it’s better than VAT increment.”
Other senators, who spoke to Akelicious, vowed to ensure that the bill did not see the light of day.
A Peoples Democratic Party Senator from the South-South, who spoke to our correspondent on condition of anonymity, said the bill would seriously affect Nigerians.
He said, “The Buhari administration knows what it is doing, that’s why they did not include the details of the bill.
“They know that the Nigerian Television Authority usually air the proceedings of the Senate live on Wednesday and they know what would happen if we make contributions based on the specific objectives of the bill.
“VAT increase will lead to hyperinflation and kill small and medium enterprises.”
Another South-South Senator, who also spoke on anonymity, promised to vote against the passage of the bill.
He also promised to lead a protest against it during the public hearing.
He said, “The bill stipulates that we are amending seven Acts but we don’t have the details of the amendments.
“The only one they told us is that it seeks to increase VAT from 5 per cent to 7.5 per cent. Who knows if it contains other provisions that are worse than that.
“I will attend the public hearing and I will rally stakeholders to reject the bill, because I did not seek the votes of my people to come and support legislation that will make their life more miserable.”
Senator George Sekibo from Rivers East gave some indication that the bill would not get the required support of many lawmakers and warned his colleagues to be careful about the legislation.
He also insisted that the copies of the bill should be made available to senators.