Still On The New Tax Law

The Nigerian polity has been abuzz over an alleged discrepancy in the recently passed Tax Law. And with it are insinuations of deliberate drive to fool the country.

To most keen watchers of the tax bills from the drafting stage and the intense lobbying that preceded their passage into law, what is going on presently is to be expected in a nation where tax processes are hitherto undermined.

The alleged discrepancy between the gazetted law and the one passed by the National Assembly raise issues that deserve thorough interrogation if not investigation.

We recall that after months of debates, public hearings, and clause-by-clause consideration, the tax bills were eventually passed into law by the House of Representatives in February this year and was subsequently harmonised with the Senate’s version.

The four bills were the Nigeria Tax Act (NTA); The Nigeria Tax Administration Act (NTAA); The Nigeria Revenue Service Act (NRSA); and the Joint Revenue Board Act (JRBA).

In June, President Bola Tinubu signed the four tax bills into law, a move which is expected to reform the nation’s tax system, effectively broadening the tax net. However, the commencement of its implementation was fixed for January 2026.

But, the saga became public when the National Assembly, specifically, the House of Representatives alerted the members and by extension the nation about it. A member of the House, Hon Abdulsamad Dasuki, flagged discrepancies between the tax law passed by the National Assembly and the versions subsequently gazetted and made available to the public.

Dasuki, at a plenary, argued that his legislative rights were breached. The content of the gazetted tax laws, he claimed, did not reflect what he and other lawmakers debated and approved on the floor of the House.

To drive home his point, the lawmaker said, “This is a breach of the Constitution and a breach of our laws, and it should not be treated lightly by this House.”

In response, the House Speaker, Hon Abbas Tajudeen, assured that appropriate steps would be taken to address the matter.

In a show of good faith, the House set up a seven-member ad hoc committee to investigate the alleged discrepancies. The committee led by Hon Aliyu Betara, is to complete its investigation and submit a report to the House within one week.

The House’s move is commendable. To all intents and purposes, the probe would help to shed light on the intricacies surrounding this presumed unfortunate situation. But more would be expected of them as the investigation gathers steam.

We urge the committee to work independently devoid of partisan leaning by ensuring timely completion of their assignment and making it public. Once that is done, Nigerians will expect the House’ to take a firm action regardless of the outcome.

That said, we cannot afford to throw away the baby with the bath water. The advantages inherent in this new law cannot be discarded because of this alleged illicit interference.

The government, in our view, should not allow itself to be held down by this inconvenient development that might force it to shift grounds on either the commencement of the law or its manifest implementation.

It must prove its resolve to ensure the law works by doing all that is necessary to make the presumed inconsistency end sooner before it escalates and drags the good intention of law down.

One way it can do this is by a total commitment to transparency in the investigation process. This much must be, again, manifestly seen in the way it cooperates with the legislators as well as the prosecution of those who may be found culpable in this perceptibly ugly scenario.

The government must let the law take its course. This is important not just because of the scandal itself but to quell whatever mistrust it might attract to the otherwise legal framework designed to enhance the nation’s internal revenue generating potential.

The benefits of the law are remarkably essential and must not yield to any deliberate effort to thwart them.

From increased exemption threshold for small companies to Minimum Effective Tax Rate and a more progressive Personal Income Tax (PIT) regime which exempts Individuals earning NGN800,000 or less per annum from tax on their income and gains, while higher income earners will be taxed at a higher rate up to 25 per cent, the law would help to ensure everyone pays his/her fair share upon which can be ensured of a well financially- resourced system for development.

What is more, beyond expanding the tax net and revenue flow, the law will, hopefully, awaken citizens to be more conscious of government’s spendings and demand more accountability and transparency.
It must be understood that this law, like most products of human effort, is not a perfect legal document by any standards. It is essentially work in progress like most laws that are not ends in themselves. As such amendments to improve its efficiency and effectiveness in the light of unfolding realities cannot be ruled out.

But the law has to start somewhere, sometime and January 1 has been scheduled for it. Testing its viability in the public space will, in our opinion, fast-track the process of amendment. We cannot continue to kick the can down the road.