Islamic Scholars Forum calls for suspension of Tinubu’s tax bill The tax reform bill sent to the National Assembly by President Bola Tinubu...

 Islamic Scholars Forum calls for suspension of Tinubu’s tax bill

The tax reform bill sent to the National Assembly by President Bola Tinubu continues to stir up controversy in the country, with the Islamic Scholars Forum (ISF) expressing its disapproval of the bill, calling for its implementation to be suspended.

In early October, President Tinubu announced his intention to make some changes to the tax collection system, including VAT, among others, prompting the federal government and northern governors to call for the resolution to be suspended.

The country’s economic council and some members of parliament also expressed their disapproval of the bills, but President Tinubu said he was determined to implement the amendments, calling for the parliament to do its job.

In a statement issued by the council on Monday, signed by its chairman, Aminu Inuwa Muhammad, its secretary, Engineer Basheer Adamu Aliyu and other scholars, it was stated that under the new system, most of the tax revenue to be collected will be benefitted by a few states.

“The proposed Tax Reform Bills, particularly the Nigeria Tax Bill (NTB), 2024 and the Nigeria Tax Administration Bill (NTAB) 2024, are inconsistent,” the statement said.

"The NTAB proposal will see most of the VAT collected in the states being transferred to the states where the companies are headquartered. This is against the principle of equity, because all the goods produced by a company are useless if there are no users.

"It is unfair because taxpayers will not benefit from the money they pay, which is against the principle of tax collection as enshrined in the 1999 Nigerian Constitution.

"Also, under the new NTB, some key government agencies like TETFUND and NITDA, which are instrumental in providing infrastructure and scholarships, will be closed."

The issues we noted in the resolutions

The Council of Scholars also outlined some issues it said it found contained in the resolutions, which it said led it to reject the amendments.

“The NTB 2024 and NTAB 2024 bills will consolidate similar taxes into one. However, the problem is that the states where the companies are headquartered will benefit the most from the collected revenue, rather than the states where the consumers are located.

“The bills will benefit the three states more than the rest of the country, which will affect their economies.”

The council added that the implementation of the reforms at a time when Nigeria is struggling with the rising cost of living is not right, adding that the NTB bill will reduce the funds given to the education support funds TETFUND, NITDA and NASANI from 4% of the companies’ profits in 2025 and 2026 to 2% in 2030.

“If the agencies are deprived of the funds they earn from the development levy fund, it will be difficult for them to continue operating even if they receive funds from the federal government,” the council said, adding that that this will have a significant impact on TETFUND's operations.

"This will require schools to find other sources of funding for school improvement and research and to sponsor teachers to further their education and professional development, which will require schools to increase their tuition fees."