NEF urges FG to rethink tax reforms

By Abubakar Yunusa

The Northern Elders Forum (NEF) has called on the federal government to suspend the implementation of the proposed Tax Reform Bills to allow for broader consultation and refinement.

The forum urged the government to prioritize dialogue with stakeholders to address concerns and gather valuable input for a comprehensive and inclusive tax reform strategy.

In a statement titled “The Position of the Northern Elders’ Forum on the Proposed Tax Reform Bills” and signed by the Chairman of the Management Board, A.M. Al-Amin Daggash, on Saturday in Abuja.

The NEF also highlighted several recommendations and reservations regarding the reforms.

Among its concerns, the forum warned against increasing the Value Added Tax (VAT), describing it as a consumption tax that would reduce citizens’ purchasing power, fuel inflation, and raise interest rates.

“No increase in VAT should be imposed until there is clear evidence of the promised economic recovery by the government,” the statement said.

The NEF criticized the proposed VAT allocation formula, arguing that it disadvantages revenue-generating states.

“As VAT is a General Consumption Tax (GCT), the rule of attribution based on the location of consumption should be uniformly applied,” the forum stated.

The group also cautioned against altering the revenue-sharing formula, emphasizing that Section 162(2) of the 1999 Constitution grants the Revenue Mobilisation, Allocation, and Fiscal Commission (RMAFC) the sole authority to determine equitable revenue sharing.

“Any attempt to whimsically change this provision could undermine the law and democratic principles,” it warned.

The NEF expressed strong opposition to moving institutions such as TETFund, NITDA, and NASENI from their current funding model to reliance on budgetary allocations, which it described as “uncertain and hazardous.”

Instead, it recommended maintaining the status quo to safeguard these strategic institutions.

In addition, the forum called for replacing contentious terms such as “ecclesiastical” in the original bills with “religious” to ensure inclusivity, and advocated for tax exemptions for religious and charitable organizations, as well as family inheritance wealth.

Highlighting concerns specific to Northern Nigeria, the forum criticized the exclusion of agricultural goods and livestock from VAT, describing it as disproportionate and detrimental to the region’s economy.

“This exclusion has glaring repercussions for Northern Nigeria, where agriculture forms the backbone of the economy,” he noted.