Northern Elders Advocate for Suspension of Tax Reform Bills and Call for Comprehensive Dialogue

The Northern Elders Forum (NEF) has expressed significant concerns regarding the Federal Government's proposed Tax Reform Bills, urging an immediate suspension and advocating for extensive consultations with relevant stakeholders.

NEF's Position on the Tax Reform Bills

In a statement released on January 5, 2025, Al-Amin Daggash, Chairman of NEF's Management Board, emphasized that while Nigerians, particularly those in the northern regions, are not opposed to meaningful reforms, the current approach to the Tax Reform Bills lacks adherence to globally recognized best practices in public policy-making.

Daggash outlined several key principles that should underpin successful reforms:

• Extensive Pre-Reform Engagements: Engaging experts and critical stakeholders prior to drafting reforms to secure their buy-in.

• Comprehensive Communication Strategy: Developing a well-defined media strategy to clearly articulate the scope of the reforms, ensuring nationwide public awareness and enlightenment.

• Transparent Implementation Mechanism: Designing a robust and inclusive process for implementing the reforms.

• Sequenced Implementation Process: Proactively planning a well-sequenced approach to ensure the reforms achieve the desired outcomes for society.

The NEF contends that the proposed Tax Reform Bills breach these principles, potentially leading to adverse effects on Northern Nigeria and the country as a whole.

Call for Inclusive Dialogue

The forum criticized the Federal Government for failing to engage critical stakeholders and experts before drafting the reforms.They advocate for a suspension of the current process and call for a more inclusive dialogue that incorporates the perspectives of all regions and sectors.

This sentiment is echoed by other northern leaders and organizations. For instance, the Bauchi Chamber of Commerce has rejected the Federal Government’s tax reform bills, emphasizing the need for wider consultation with stakeholders.

Implications of the Proposed Reforms

The proposed Tax Reform Bills aim to streamline tax codes and generate more revenue for the government.However, there is concern that the allocation formula for Value Added Tax (VAT) revenue may disadvantage northern states, exacerbating regional economic inequalities.

Currently, 50% of the total VAT distributed to states is shared equally, 30% is allocated based on population size, and 20% by their tax contribution.The proposed reforms suggest allocating 60% based on contribution, reducing the population quota to 20%.Northern states, which are typically more populous but economically less developed, fear this change could jeopardize the well-being of their people.

Recommendations for a Way Forward

The NEF recommends that the Federal Government:

1. Suspend the Implementation of the Proposed Tax Reform Bills: To allow for a more thorough review and consultation process.

2. Engage in Extensive Dialogue with Stakeholders: Including experts, regional representatives, and the general public to gather diverse perspectives and inputs.

3. Develop a Comprehensive Communication Strategy: To ensure that the objectives, benefits, and potential impacts of the reforms are clearly communicated to all Nigerians.

4. Design an Inclusive Implementation Mechanism: That considers the unique economic landscapes of different regions to ensure equitable outcomes.

By adhering to these recommendations, the government can foster a more inclusive and effective reform process that addresses the concerns of all regions and promotes national unity.

The Northern Elders Forum's call for the suspension of the Tax Reform Bills underscores the importance of inclusive dialogue and adherence to best practices in public policy-making.It is imperative for the Federal Government to consider these concerns and engage in comprehensive consultations to ensure that any proposed reforms are equitable and beneficial to all Nigerians.