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Senate succumbs to pressure, stops action on controversial tax reform bills

The Nigerian Senate has temporarily suspended proceedings on the contentious tax reform bills currently before it, following widespread public agitation and criticism. The decision was announced during Wednesday’s plenary session presided over by the Deputy Senate President, Jibrin Barau.

Barau revealed that the Senate’s Finance Committee has been directed to halt all activities related to the bills, including public hearings, until the issues causing public dissatisfaction are resolved.

In a bid to address the controversies, the Senate constituted a special committee tasked with engaging the executive branch and collaborating with the Federal Government to review and refine the proposed legislation.

The tax reform bills in question include the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; and the Nigeria Tax Bill, 2024.

The proposals have sparked heated debates, with Northern governors and lawmakers describing them as undemocratic and potentially harmful to their region’s economic interests. A significant point of contention is the proposed “derivation” formula for value-added tax (VAT) distribution, which critics argue would disproportionately disadvantage northern states.

Adding to the drama, the National Economic Council recently requested the withdrawal of the tax bills for further consultations, emphasizing the need for broader stakeholder input.

Speaking to the BBC Hausa Service, Senator Shehu Buba (APC, Bauchi South) revealed that Northern Senators have collectively agreed to recall the bills for a more thorough review. “These bills are complex and require careful examination by tax policy experts,” Buba said, underscoring the concerns surrounding the VAT derivation formula.

Addressing the controversy, Deputy Senate President Barau emphasized the Senate’s role as a stabilizing force in times of national difficulty. “The Senate comprises men and women of wisdom and experience, entrusted to legislate for the peace, stability, and development of the nation,” he said.

Barau announced plans for a high-level meeting scheduled for Thursday between the Senate leadership, the special committee, and the Attorney General of the Federation. This meeting will aim to identify and resolve the contentious aspects of the bills in collaboration with the judiciary.

“The President has been working to address the nation’s pressing challenges, and we are committed to supporting these efforts. However, we also recognize the need to ensure that no new policies worsen the current difficulties,” Barau stated.

Barau appealed for unity, urging senators to set aside political, ethnic, and regional differences in resolving the matter. “In collaboration with the Executive Arm of Government, we agreed to establish a forum to address contentious areas to ensure national unity and progress,” he added.

The special committee includes Senate leadership and notable members such as Adamu Aliero (PDP, Kebbi Central), Orji Kalu (APC, Abia North), Seriake Dickson (PDP, Bayelsa West), and Adeola Olamilekan (APC, Ogun West).

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Written by Olusesan Oba

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