By Abbati Bako,bsis,pol.Alumni@Kent,Uni
Politics is a complex game of competing values, interests, and ambitions. Elected officials and governments have a responsibility to protect the values of their constituents, including religious, traditional, cultural, and family values, as well as environmental concerns. In politics from the post of elected president and elected councillor are all servants of the people.
Moreover, governments must prioritize the interests of their people, focusing on economic growth and development, food and want security, education, healthcare, human rights, equal opportunities, and women’s rights. Every nation or society must also have an ambition to develop, driving infrastructural growth, economic interests, energy supply, higher education, and transportation systems – the backbone of economic interplay.
This is the essence of political democracy, where representatives of the people are elected to be their voice and ambassadors within the corridors of power. In a constitutional democracy, these representatives are expected to speak on behalf of the people, upholding their values, interests, and ambitions.
In the context of Nigeria’s tax reform, President Bola Tinubu’s administration must balance competing values, interests, and ambitions. The proposed tax reform aims to promote economic growth, reduce inequality, and increase government revenue. However, it is crucial to ensure that the reform prioritizes the needs and interests of all Nigerians, particularly the most vulnerable populations.
Ultimately, the success of Nigeria’s tax reform depends on the government’s ability to navigate the complex game of politics, balancing competing values, interests, and ambitions while prioritizing the needs and interests of all Nigerians.
Kudos to His Excellency the President of Nigeria Senator Bola Tunubu for his willingness to listen to the complain of Nigerians on the issue of tax reform. For many years there’s no much contrivances in Nigeria like the current situation of tax reform especially from the Northern part of Nigeria whereby the elites and stakeholders in the region criticized the tax reform bill for the fact that will bastardize the economy of region.
President Bola Tinubu’s directive to the Ministry of Justice to collaborate with the National Assembly and identify areas of complaint regarding the proposed tax reform in Nigeria marks a significant step towards addressing the country’s fiscal challenges.
The proposed tax reform aims to reshape Nigeria’s fiscal framework and establish a comprehensive legal framework governing taxation of incomes, transactions, and instruments.
The tax reform proposal has sparked controversy, with governors and traditional rulers of Northern Nigerian states rejecting the bill, citing that it does not align with the interests of the North and other sub-national entities. Despite this, the administration remains optimistic about the reform’s potential to transform Nigeria’s tax landscape and achieve a minimum of 18% tax-to-GDP ratio within the next three years.
*Key provisions of the proposed tax reform include:
Increment in VAT: Raising the value-added tax (VAT) from 7.5% to 10% by 2025, with further increases to 12.5% from 2026 to 2029, and 15% from 2030 onwards. In the opinion of this writing this will create more inflation or even stagflation especially in the Northern Region of the Country whereby the system of “Family Welfarism System” Exists for Centuries.
27.5% Company Tax:
Imposing a tax rate of 27.5% on companies, with small firms taxed at 0%. Another point that can lead to inflationary problems for the fact that companies that producing products will automatically increase the prices of their goods.
4% Development Levy on Companies: Introducing a development levy on companies, excluding small and non-resident companies, to fund the Student Education Loan Fund. In reality and practice can this be practicable? Sincerely, in capitalist market system the target of every company is profit; can they sacrifice 4% for students education loan fund? In the opinion of this writing it will be very much difficult in practicalities of this.
5% Excise Tax on Lottery and Gaming Income:
Imposing a 5% excise duty on revenue from lottery and gaming trades or businesses. This acceptable, indeed.
The proposed tax reform also aims to digitize revenue collection, streamline taxes, and create a more conducive business environment.The administration’s efforts to address fiscal indiscipline, reduce the cost of governance, and promote prudent utilization of existing resources are crucial in fostering compliance and reducing the costs associated with tax collection. Excellent idea, indeed.
Ultimately, the success of the tax reform hinges on the administration’s ability to address the concerns of various stakeholders, including those who have rejected the proposal. By doing so, Nigeria can move closer to achieving a more efficient and effective tax system that supports sustainable development and economic growth.
To be continued Insha’Allah.
Dr. Abbati Bako,Political Strategy and Communication Consultant @IPRC, Nigeria, Researcher in International Politics@Skyline University, Kano and Treasurer@Kano Chamber of Commerce
Email abbatibako@gmail.com
Gsm 09077889959
