By Saawua Terzungwe, John Chuks Azu, Baba Martins, Faruk Shuaibu (Abuja) & Peter Moses (Lagos)

 

President Bola Ahmed Tinubu has declared that there is no going back on his administration’s decision to carry out tax reforms.

The president spoke last night during his maiden presidential media chat aired by the Nigerian Television Authority.

The tax reform bills, which are before the National Assembly, have elicited negative reactions from different groups, including northern leaders. Some leaders from other parts of the country also called for wider consultations.

The president said: “The tax reform is here to stay. The reform is pro-poor and it is to widen the tax net, so we can have more people paying.

“The hallmark of a good leader is the ability to do what you have to do at the time it ought to be done.”

Tinubu also said he was not perturbed by the outcry of some people who wanted more consultations.

“You cannot uniformly satisfy a larger community of tax evaders.  All we are asking for is to widen the tax net, make the cake larger and let us share a larger meal. They will still ask for this consultation no matter how long I delay it.”

“…That is my philosophy. You have given me the mandate to govern… Let me govern within the limit of my capacity and I believe I have the capacity,  that is why I went into the race.

“I am focused. I know what Nigerians need, and I know what I must do for Nigerians. It is not going to be El Dorado for everybody, but the new dawn is here. I am convinced, and you should be convinced, too,” he said.

 

‘I won’t downsize my cabinet’

The president also said he was not prepared to downsize his 48-member cabinet despite the clamour for reduction of cost of governance in the country.

He said the size of Nigeria and the challenges bedevilling the country required competent people to work together to surmount them.

He was responding to a question on whether he was willing to heed the advice from some Nigerians to let go of some ministers.

“I am not prepared to bring down the size of my cabinet. I saw the need before I put them together. You don’t give somebody an assignment that they cannot fulfil. No! The job description must be efficient and effective,” he said.

“Nigeria is a large country. If you are to entertain over 200 million (people), just on entertainment. Calculate how many stewards you would require. Let’s pay attention to efficiency. Efficiency and effectiveness are the hallmarks of the philosophy behind that cabinet,” he said.

The president commended the security agencies, saying he was proud of “what they are doing today.”

 

‘Why we’ll continue to borrow money’

Tinubu also said borrowing is not criminal, insisting that the country must borrow to address some of its critical challenges, including infrastructure.

He stated: “We have been coming from a mismatch of our needs. We have a serious infrastructure deficit. If you don’t put money on the long-term matching project, long-term basis, we don’t have the short-term to manage a long-term mismatch. That’s wrong.

“Yes, we have headed the wrong road in the past. I don’t want to look at that. I want to think about prosperity for our country. I want to think about tomorrow, today.”

He noted that his administration has done well in the area of security and promised to do more to secure the country.

 

‘No regret removing petrol subsidy’

The president said he had no regret over the removal of the petrol subsidy removal.

On why he did not adopt a phased removal of petrol subsidy, Tinubu said: “We were spending the fortune of our future generations, we were not investing. We were just deceiving ourselves. That reform was necessary. Why should you have expenditures that we don’t have revenue for?

“We should teach management in all our programmes, we have to manage our resources. There is no way you give out fuel and allow all the entire neighbouring countries as Father Christmas.

“I don’t have any regret whatsoever about removing the subsidy. It is necessary. We cannot spend our future generation investments upfront.”

Tinubu blamed the recent stampedes that killed scores in Oyo and Anambra states as well as Abuja on “grave error” and lack of organisation on the part of the donors.

“It is sad but we will continue to learn from our mistakes,” he said.

 

‘I don’t believe in price control’

On food security, the president said he did not support price control as a means of bringing down food prices.

He said the forces of demand and supply would eventually force down the prices.

“I don’t believe in price control, we will just continue to supply the market, we work hard to supply the market. It is a question of supply and demand; it will come to a stage where you cannot hold no more. It will come to a stage where the economic variables will work against you.

“For example, the fuel prices, I introduced the naira exchange, they did not want to comply, they were arguing with me. I said leave it to the free market, now the prices are coming down gradually, the market is being saturated, no monopoly, no oligopoly, we have a free market economy flowing and people are learning management.

“My friend told me he has five Rolls Royces, the other day. I saw him in his Honda and I asked him, he said that is where you put me and I said I did not put you there. Because of the cost of fuel, he could no longer maintain five limo types of vehicles. It is not negative to learn to manage.  You learn to control your electricity bills, switch off the light. Let us learn to manage,” he said.

 

‘I increased minimum wage to stop corruption’

Tinubu also said he increased the national minimum wage from N30, 000 to N70,000 to stop corruption in the country.

“There are so many anti-corruption mechanisms that you can put in place that will help the people not to be corrupt. Pay them good living wages. I have moved from N35, 000 to N70, 000.  To me, that’s anti-corruption. And if I can earn more, I am giving more money to the state and local government levels. I have been transparent with my earnings. Every month there is a publication as to how much this country is making.

 

Different views on tax reform bills

Daily Trust reports that a new research conducted by the Centre for Democratic Development Research and Training (CEDDERT) has provided further insight into the bills, concluding that they have serious implications for the current structure of the Nigerian federal system.

The publication authored by Abubakar Siddique Mohammed and Aliyu Rafindadi Sanusi warned against bulldozing the National Assembly to quickly pass the bills, saying passing the bills “Without a national debate, may turn out to be counterproductive as it will heighten the tension in the country and further erode the trust Nigerians have in that important state institution.”

The publication titled, “Economic and Political Implications of the Nigerian Tax Reform Bill, 2024” analysed the various provisions of the bills, saying they were full of half-truths, saying, “The undue focus on revenue sharing and derivation component is deliberately heightened to achieve this, when there are several more important issues for the ordinary Nigerians as well as constitutional matters.”

Also in an interview with the Sun Newspaper, the Leader of the 9th Senate, Senator Abdullahi Yahaya Adamu, said even though he embraced the concept of changing the old system of taxation, he questioned the “technicality” and “political” wills deployed in championing the bills.

He advised Tinubu to consider introducing the new tax policies in “phases” instead of lumping all of them together, arguing that the Federal Inland Revenue Service (FIRS) may lack the technical manpower to solely collect the volume of taxes handled by agencies in the country like NPA, NIMASA , among others.

On the political side, he posited that the bills may not see the light of the day no matter how “brilliant” they appear except they receive the ‘political’ buy-in of political, religious and tribal stakeholders across the country which can be achieved through broad consultations.

“It is an excellent attempt to depart from what we are used to, to a new thing, but moving from an old to a new thing involves a lot of challenges…Naturally, people fear ‘change’ because they don’t even know how it will impact them.

“…I am a member of the Senate Elders Committee on Tax Bills so I’m not supposed to make any comment, but this is my personal view and the fears of change that people have. Now, if you are going to centralise a lot of tax collections in one single institution, you must ask if that institution has the institutional mechanism and required manpower to administer those kinds of taxes. For example, if you decide that the Federal Inland Revenue Service (FIRS) is to collect taxes meant to be collected by agencies like the Nigerian Maritime Administration and Safety Agency, NIMASA , Nigerian Ports Authority (NPA), Nigerian and Upstream Petroleum Regulatory Commission (UPRC), you have to ask if the FIRS has the manpower, technology and experience to carry out such task.

“There are a lot of things that need to be clearer,  maybe a lot of engagements , so people are not against the tax bills as such, but they are fearful about the lack of clarity about what will happen, because they are used to the old system.

“One thing I find objectionable is that people compare us with the practice of other countries like the United States but they forget that every nation or institution has its own development trajectory. You cannot just take a system and graft it on another country and think that it will just go like that so you have to have an institutional development history,” he said.