By Abiola Olawale
The Nigeria Labour Congress (NLC) has publicly called on President Bola Ahmed Tinubu to withdraw the Tax Reform Bills currently before the National Assembly.
The union said the demand stems from its desire for a more inclusive process where all key national stakeholders can participate in shaping the tax bills process and protocols.
The NLC emphasized the need for widespread consultation and inclusivity that would lead to a tax framework that would enjoy broader acceptance and serve the purpose of national development more effectively.
This was made known in a New Year Message issued by the President of the NLC, Comrade Joe Ajaero.
The statement reads in part: “We must build inner strength to find this collective resolve across the length and breadth of our great nation. This is our civic responsibility—one we must embrace with unwavering determination.
“Access to food and nutrition, better healthcare, quality housing, education, transportation and greater security of lives and properties, including the right to participate in decisions on how they are ruled, are the key expectations of the people and workers.
“To create a thriving, democratic nation, we need a system built on the tenets of social dialogue, allowing critical stakeholders to participate actively in nation-building. Such inclusiveness will foster deeper ownership of government policies, ensuring stability and sustainability.
“It is on this premise that we once again call on the federal government to withdraw its present tax bills before the National Assembly so that all key national stakeholders will be part of the process.
‘’As we embark on a national dialogue in Ibadan in January 2025, we want to join hands in co-creating a new national tax law that would enjoy wider acceptance and fulfil its purpose of propelling national development, which we believe is the main objective of government.
“As we move into 2025, we urge the federal government to prioritize industrial peace by taking social dialogue seriously, pursuing pro-human-progress policies, and respecting agreements with trade unions.”
It would be recalled that Tinubu, had on October 3, asked the national assembly to consider and pass four tax reform bills.
The four bills are the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service Establishment Bill and the Joint Revenue Board Establishment Bill.
However, the tax reform bills proposed by Tinubu have elicited widespread controversy across various sectors of the economy.
The new tax bills under consideration in the National Assembly propose adopting a derivation principle in the allocation of VAT revenues between the federal government and sub-national entities.
These proposals have sparked controversy, with northern elites openly rejecting them, arguing that the changes may not favour their region.
Under the current Section 40 of the VAT Act, VAT revenue is allocated as follows: 15% to the Federal Government, 50% to the States and Federal Capital Territory (FCT), and 35% to Local Governments. The allocation to states and local governments incorporates a derivation principle of at least 20%.
Although not explicitly detailed in the VAT Act, other factors influencing the distribution include 50% based on equality and 30% based on population.
