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A chieftain of the All Progressives Congress, APC, in the South East, Dr. George Agbakahi, has declared that the Tax Reform Bill proposed by President Bola Ahmed Tinubu, which is currently before the National Assembly will be beneficial to the generality of Nigerians.
He said the bill is for the interest of Nigerians irrespective of their political, religious, geographical, and economic leaning.
There has been controversy ever since the President presented the bills before the National Assembly, with major opposition coming from the Northern part of the country.
The National Economic Council, NEC, also at some point urged Mr President to withdraw the bill and allow for more consultation.
However, Agbakahi, South East Leader of Tinubu Support Organization and member, 2023 Presidential Campaign Council, PCC, Media and Publicity Directorate, stressed that the proposed reforms were “pretty bold, fair, equitable, comprehensive, progressive, and inclusive.”
He stated that there was nothing wrong if the South East Senate caucus wishes to reach out to their various constituents and state governments during this Christmas season before taking an objective decision, noting that such move, as recently indicated by the caucus, was the beauty of democracy.
The APC Chieftain made his views known during an Arise News Television interview at the weekend, monitored by our reporter.
He stressed the importance of addressing the issues within the existing tax system, noting, “Since independence, we’ve always had a problematic and complex tax system.”
Highlighting the bill’s benefits for lower-income earners, Agbakahi explained that it aims to reduce the tax burden on Nigeria’s less affluent citizens.
“This tax provides opportunities for lower-income earners in Nigeria to pay a lower tax as opposed to what we have now.
“In Nigeria, the very wealthy are not paying their own fair share of the taxes,” he remarked.
Focusing on the Southeast region, Agbakahi underscored the positive impact the proposed tax system could have on local businesses.
“Trading and commerce are truly the nomenclatures of the South East, and this particular tax system that is being proposed aims to support local businesses,” he said.
The party Chief added that reinvesting the revenue generated from the reform could create employment opportunities across Nigeria.
While Agbakahi endorsed the reform, he called for thorough scrutiny to address any potential issues, stating, “The tax reform is a good one but let them look at it if there are some grey areas.
“They have the capacity to work on it and get back to the Nigerian people and to the executive. That’s why we are in a democracy.”
He believes that the comprehensive nature of the bill will help expand the tax net to include millions of Nigerians who currently do not pay, thereby increasing the country’s revenue.
It will be recalled that South East senators, along with colleagues from the North, called for broader consultations before the passage of the Tax Reform Bills.
This initiative, according to Agbakahi, is a positive step towards ensuring the bill meets the needs of all Nigerians.
The tax reforms bill proposed by the president has been a topic of intense conversation in the past couple of months and has created political divisions in the country.
Agbakahi noted that this is not a surprise to him, as taxation since independence has been problematic and has long been a sensitive subject often seen as complex, inefficient, and inequitable.
He stated that there have in recent times been widespread tax evasion, poor compliance, and general lack of trust in the tax regime.
“According to the Nigeria Governor’s forum, over 81% of taxable adults and businesses do not pay taxes. In 2021, FIRS reported that only 41 million Nigerians paid taxes out of a population of over 220 million and in 2022, FIRS collected 10.1 trillion Naira as tax revenue, the highest tax collection recorded in the country’s history.
“When compared to other African countries in the same category with us, we are far behind in generating tax revenue. For example, Kenya collected 16.39 billion dollars in 2023, whereas Egypt generated about 53 to 55 billion dollars in 2023,” he said.
He said that in light of the lack of compliance and tax evasion, something was definitely wrong somewhere with the existing tax system.
“That’s why the president, since he came on board, decided to change the narrative. There is now a paradigm shift with the tax reform bills in order to address these factors affecting our tax collection.
“Individuals earning below N50,000 per month may not need to pay personal income tax (PIT) and companies with turnover below N50 million a year may be exempted from company income tax (CIT) depending on their tax threshold.
“Moreover, the new tax band proposed in this tax system includes rates ranging from 7% to 24% for different income categories. The reforms generally propose clearer, fewer tax bands with adjusted rates to ensure higher income earners pay more,” he added.
Specifically, he stated that the reforms will benefit the South East tremendously.
“Truly, trade and commerce are the nomenclature of the South East. The reforms aim to support local businesses, particularly in Aba and Onitsha, which are the commercial hubs of this great country.
“By offering tax breaks to small and medium enterprises as much 10 to 20 % on locally produced goods, this could help boost the South east economy and local industries, thereby reducing the reliance on imports and create jobs and also improve the living standards of the people.
“With this development, locally made goods may now become more affordable, particularly with the huge tax on luxury imported items,” he said.
He maintained that President Tinubu is pretty idealistic and understands the intricacies and underpinning of governance, and above all has the interest of the country at heart and is working on fulfilling the aspirations of Nigerians.
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