The Arewa Consultative Forum (ACF) has submitted a detailed report to the National Assembly, outlining its stance on the Executive Tax Reform Bills. The report, compiled by a committee of experts, aims to provide guidance and recommendations on Nigeria’s proposed tax law reforms.

Public Hearing on Tax Bills Begins

The Senate is set to commence a public hearing on Monday, followed by the House of Representatives on Tuesday, where stakeholders will present their views on the controversial bills. The Chairman of the Senate Committee on Finance, Senator Sani Musa, confirmed that deliberations would take place on February 24 and 25.

ACF’s Key Concerns and Recommendations

The ACF’s report raises several critical issues regarding the tax reforms, particularly the proposed increase in the Value Added Tax (VAT) rate. The forum has urged the retention of the current 7.5% VAT rate, warning that any hike would further strain citizens and businesses.

  • Economic Impact of VAT Increase: The ACF cautions that an increase in VAT could reduce consumer spending and hinder economic growth, despite the government’s need to boost revenue.
  • Alternative Revenue Strategies: The report recommends improving VAT collection efficiency, formalizing the informal sector, and using digital technologies to expand the tax base instead of raising tax rates.

Clarifying the Concept of “Derivation”

Another major issue highlighted is the ambiguity in the definition of derivation and revenue distribution. The ACF calls for clear guidelines to ensure that states and local governments receive their fair share of revenue based on a consensus-driven approach.

  • The forum insists that clarifying derivation will prevent disputes and enhance transparency.

Reducing Powers of Revenue Board Leadership

The ACF report also criticizes the excessive supervisory powers given to the Chief Executive Officer and Chairman of the Joint Revenue Board.

  • The forum recommends reducing these powers to prevent abuse and ensure accountability.

Preserving TETFUND and NITD

The ACF urges the retention of the Tertiary Education Trust Fund (TETFUND) and the National Information Technology Development Fund (NITD), arguing that these institutions are vital for education and technological advancement in Nigeria.

Tax Compliance in Local Languages

The report suggests that tax records and returns should be allowed in local languages alongside English.

  • This move aims to simplify compliance and ease the burden on taxpayers, particularly in rural areas.

Call for Stakeholder Engagement

The ACF has distributed its report to various stakeholders, including Northern State Governors, traditional rulers, and government agencies.

  • The forum urges all stakeholders to engage with the National Assembly to ensure the emergence of fair, efficient, and growth-oriented tax laws.