Political activist and civil society leader, Dr. Usman Bugaje, has accused President Bola Tinubu of adopting a monarchical approach to the proposed Tax Reform Bills.
In an interview on Arise TV on Thursday, Bugaje described the controversial tax reform bill as “out of touch with reality” and suggested it should be discarded. He argued that the bill does not align with Nigeria’s economic conditions and could exacerbate hardship and insecurity.
President Tinubu submitted four tax reform bills to the National Assembly on October 3, 2024, which faced significant opposition, particularly from Northern legislators.
Under the existing tax law, states use a 50:30:20 sharing ratio—50% for equality, 30% for population, and 20% for derivation. The new bill proposes a 20:20:60 sharing ratio for equality, population, and derivation, respectively.
The bill states, “Notwithstanding any formula that any other law may prescribe, the net revenue accruing by virtue of the operation of chapter six of the Nigeria Tax Act shall be distributed as follows: (a) 10% to the Federal Government; (b) 55% to the State Governments and the Federal Capital Territory; and (c) 35% to the Local Governments. Provided that 60% of the amount standing to the credit of states and local governments shall be distributed among them on the basis of derivation.”
Bugaje criticized the bill, stating, “The governors rejected it, and taxation is on the concurrent list. The president is treating this as sacrosanct. How can a bill before the National Assembly be considered sacrosanct? The constitution places the National Assembly first, followed by the executive. The president is behaving like a monarch.”
He also questioned the understanding of the Presidential Tax Reform Committee, led by tax expert Taiwo Oyedele, regarding Nigeria’s economic and regional diversities. Bugaje said, “I have engaged Mr. Taiwo, who leads the team that crafted the nearly 300-page tax reform bill. It seems they do not understand the society for which this policy is made. This appears to be the work of professionals in Lagos and Abuja who are unaware of the consequences of their proposals.”
Bugaje highlighted the lack of clarity on key issues such as attribution and derivation, which he believes will lead to further rejection of the bill. He concluded, “The proper course of action is to discard the Tax Reform Bill and start anew. While I appreciate the need for tax reforms and broadening the tax net, there are critical issues that must be addressed.”
