The Tax Reform Bill submitted to the National Assembly by President Bola Ahmed Tinubu has sparked widespread controversy across the country. Senator Barau Jibrin, the presiding officer in the Senate, who presented the bill, is now facing significant backlash, particularly from his larger constituency.
The manner in which Senator Barau introduced the bill has drawn him into turbulent waters, creating a public outcry akin to a hurricane of considerable force. Critics argue that the bill, if passed in its current form, would impoverish at least 35 of Nigeria’s 36 states, including the Federal Capital Territory (FCT). The proposed legislation seeks to alter the existing Value Added Tax (VAT) sharing formula which many see as detrimental to state finances.
There are widespread suspicions that Senator Barau is acting in concert with the Presidency to undermine the financial inflow of the states. A respected legal expert from Yobe State recently analyzed the implications of the bill in a viral audio clip, concluding that its passage would make salary payments in most states nearly impossible. This position was echoed by the governor of Borno State.
As a result, Senator Barau Jibrin now finds himself embroiled in a deep political crisis that threatens to jeopardize his career. His perceived role in pushing the bill has placed him at the center of a political storm that could have lasting consequences for his future political aspiration
To salvage his political career, it would be prudent for Senator Barau to reject the bill in its current form and advocate for its resubmission after addressing all identified flaws. The bill should not be rushed through the legislative process but should undergo thorough scrutiny by National Economic Council and other stakeholders.
The President would also do well to draw lessons from Ghana, where policies focused on industrial revitalization that have yielded positive outcomes. Nigeria could benefit from establishing an Industrial Resuscitation Fund to support the manufacturing sector which will lead to job creation, wealth generation and reduce importation of finished products thus strengthen the value of the Naira against theUS $.
Similarly, the restructuring and refinancing initiatives introduced by the Central Bank of Nigeria under the leadership of His Highness, Emir Muhammadu Sanusi II can be revisited in order to salvage the industrial sector
Taxation and high interest rates do not drive economic growth. Instead, lower taxes and reduced interest rates create an attractive environment for investors. Foreign investors prioritize low-risk economies with potential for steady growth and profitability.
The current approach to tax administration should focus on incentivizing and motivating economic growth. Policies should aim to combat inflation, boost foreign exchange earnings, and reduce foreign exchange outflows.
If not reconsidered, the Tinubu administration’s economic strategy could have significant electoral implications in the 2027 election cycle.
Mahmud Shuaibu Ringim
HALIM Consulting Ltd
Kano
mahmudshuaibu44@gmail.com
