The Senate, in a historic move yesterday, approved 56 amendments to seven tax bills sent to it by President Muhammadu Buhari.
Unlike previous amendments approved by the upper legislative chamber, it did not alter or reject all the 56 amendments sought by Buhari in the Finance Bill.
This is coming amid a nationwide outcry and protests by citizens and stakeholders over its likely impact on the impoverished citizens.
One of the amendments for instance was for an upward review of Value Added Tax (VAT) from 5 to 7.5 per cent.
But surprisingly in less than thirty minutes yesterday, the Senate unanimously considered all the clauses of the Bill which amended seven different tax laws including the Petroleum Proflt Tax Act (PPT), Custom and Excise Tax Act, Company Income Tax Act (CITA), Personal Income Tax Act, Value Added Tax Act, Stamp Duties Tax Act, and Capital Gains Act.
The objectives of the Bill as outlined by President Buhari, who had sent the Bill to the Senate last month, are to strategically promote fiscal equity by mitigating instances of regressive taxation, reform domestic tax laws to align with global best practices; introduce tax incentives for investment in infrastructure and capital markets; and support small businesses in line with the on-going “Ease of Doing Business Reforms; as well as raise revenues for the government through various fiscal measures.
He had also hinted that the additional funds from the increment of taxes would be used to fund healthcare services, educational and infrastructural programmes. In addition, 85 per cent of VAT revenues will be allocated to both states and local governments.
Leader of the Senate, Abdullahi Yahaya, in his remarks at plenary before the Senate dissolved into the committee of the whole to pass the 56 clauses of the consolidated Bill, called on his colleagues to look at the Finance Bill 2019 seeking to raise the revenue accruable to the Federal Government through increased tax regime from 5 to 7.5 per cent.
Abdullahi said the Bill should be viewed as a revenue generating tool for a better economy than from partisan view.
His words: “The issue of the economy is an issue beyond politics. Whether it is APC today or PDP tomorrow, we have to come out and think of how to improve it.
The major problem of the Nigerian economy is revenue. This is a N140trillion economy but hardly raises N8trillion of revenue from within yearly”
He said this lack of revenue has been a major reason government in the past and present have challenges in delivering in the needed infrastructure to support and sustain the economy. He maintained that while he remains a member of the All Progressives Congress (APC), it was important to critically look at the amendment and tweak them to serve the interests of Nigerians.
Abdullahi expressed the belief that revenue had remained a major challenge to the nation.
However, the motion was debunked by Abba Moro, a former minister of interior, who argued that the challenge with revenue in the country was poor management and not the lack of it.
Ifeanyi Uba Anambra Central, (YPP) decried the public hearing as it did not have representatives of major oil producers and petroleum marketers.
“I need to draw your attention on the amendment of the Petroleum Profit Tax Act (PPTA). It will be so bad for Nigerians as the down stream and upstream industries are not growing.
“Looking at the (PPT), it is going to add more pains to Nigerians, I am of the opinion that it must be reviewed and I want to correct the committee that there was no representation from the industry in this public hearing, the tank farm owners association were not there, the major marketers were not there, so I do not see a true reflection on the report of the committee,” Ifeanyi submitted.
Gabriel Suswam Benue North East, said the Bill meant to raise revenue for the Federal Government would deliver shocks to the people, hence he demanded the provision of social safety nets for the masses.
“Some of the amendment sought here are on the tax revenue and to increase it, no matter how you see it here, this is something that is going to affect all Nigerians. “This is a shock. People are not used to it and it comes so sudden,” Suswam stated. But in his concluding remarks after the clause-by-clause consideration, President of the Senate, Ahmad Lawan, said the Bill’s passage by the Senate was intended “to ensure that we (National Assembly) streamline the tax system in Nigeria and get revenue for government to provide services and infrastructure to the citizens. “What we have done is very significant because this is to ensure we not only have credible and reliable sources of funding for the 2020 Budget, but also for subsequent activities of government.
Meanwhile, Organised Labour and members of the Nigerian Private Sector (OPS) yesterday in spontaneous reactions to the passage of the Finance Bill which will increase VAT, Excise Duty, Stamp Duty and others, reject it in its entirety, stressing the move was not a sign of good governance.
Regional President of IndustriALL Global and General Secretary of the National Union of Textile Garments and Tailoring Workers of Nigeria (NUTGTWN), Issa Aremu, for instance said the increase was rather unjust especially on poor Nigerian workers who have been at the receiving end of inflation, poor wages and other economic challenges.
“It’s unfair to have discriminatory taxation imposed on poor Nigerians, especially when the Minimum Wage promised workers are yet to paid. It’s uncalled for to have additional tax imposed on poor Nigerians,” he said.
For Nigeria Employers Consultative Association (NECA) the passage of the bill came as a rude shock to the generality of Nigerians that the “People’s Senate” without due process of going through memoranda submitted by stakeholders and which are still pouring in passed the Finance Bill amendments to increase VAT, excise duty, stamp duty, among others.
NECA’s Director General Timothy Olawale, lamented that Nigerians by implication are now to pay more for goods and services from 2020 when the bill comesinto effect. He said, “Government especially the National Assembly has condemned the citizenry to a life of servitude to fuel their appetite for easy life.