March 06, (THEWILL) – “The hardest thing in the world to understand is the income tax” __ Albert Einstein.
That was the case with the Tax Reform Bills in Nigeria until it got to the National Assembly, where more people were made to understand the nitty-gritty of the bills, as opposed to relying on speculations by those who did not understand what the bills were all about.
One can say without equivocation that the dust raised by the initial introduction of the Tax Reform Bills is gradually settling down as the grey areas and concerns raised by Nigerians are being addressed through a legislative process.
After receiving the bills, the National Assembly got down to brass tacks, taking holistic and unbiased views of the bills to establish the grievances of people and determine the issue that engendered fears and apprehensions.
One of the ways the National Assembly achieved this was through the conduct of public hearings where members of the public were allowed to air their views and make inputs into the bills.
The House of Representatives organised a 3-day public hearing on the Tax Reform Bill by the House Committee on Finance, ably led by Rt. Hon. James Abiodun Faleke.
The forum provided a veritable platform for key stakeholders to air their views and contribute to strengthening the bills, while the chairman made the session lively and participatory with his mature interventions and democratic posture.
This led to a successful public hearing, after which the House of Representatives Committee on Finance began analysing the various submissions it received regarding the Tax Reform Bill.
Stripped of the misconceptions and initial assumptions, the bills, the committee pointed out, were meant to foster economic growth and investment through lower Corporate tax rates, encouraging business expansion, as well as attracting foreign and domestic investors.
This is in cognisance of the fact that the tax incentives it will accord small businesses will boost entrepreneurship and lead to job creation and economic diversification as the simplified tax processes reduce administrative burdens, allowing businesses to focus on productivity rather than compliance complexities.
At the public hearing, while observations raised by participants were duly noted, the overriding benefits of Increased Government Revenue for Development through a broadened tax base that ensures more people and businesses contribute to national revenue and reducing over-reliance on oil and external borrowing were factored in.
The process made it possible for people to see that the bills were about efficient tax collection mechanisms which would minimise evasion and leakages and ensure funds are available for infrastructure, education, and healthcare.
It also opened the eyes of people to the other advantages, which include the reduction of income Inequality through progressive taxation policies that ensure higher earners contribute more, while low-income earners get relief through exemptions.
Now, most people are clear that VAT exemptions on essential goods and services protect vulnerable populations from increased living costs and that tax reforms engender Inflation Control and Economic Stability.
It was also established through the deliberations that balanced tax policies help manage inflation by preventing excessive consumer price hikes, while fiscal responsibility through improved revenue mobilisation reduces government borrowing, stabilising the economy.
As observed by experts, a revised VAT revenue-sharing formula promotes equity in resource allocation, ensuring that all states benefit and puts a lie to the claim that only Lagos and Rivers states would benefit.
People have come to appreciate the fact that reforms empower states to generate more revenue locally, fostering financial independence and reducing reliance on federal allocations and that a well-designed Tax Reform Bill is more than just a policy but a tool for sustainable progress.
By making taxation fair, efficient, and growth-oriented, people have come to accept that these reforms create an environment where businesses thrive, public services improve, and economic stability is achieved.
As the committee spends sleepless nights fine-tuning the Bills, Hon Faleke expresses confidence that at the end of the exercise, more people will come to appreciate the genuine intentions of the bills and give kudos to President Bola Ahmed Tinubu for his initiatives towards improving the economy of the country.
*** written by Yakubu Dati
