Zulum Warns Proposed Tax Reform Bills Could Devastate Northern Economy

Borno State Governor, Babagana Zulum, has raised serious objections to the proposed tax reform bills currently under consideration by the National Assembly, cautioning that their implementation could cripple the Northern economy and negatively affect other regions of the country.

In an interview with BBC Hausa on Friday, Zulum criticized the expedited legislative process for the bills, contrasting it with the Petroleum Industry Bill, which took nearly two decades to pass into law.

“Why the rush? The Petroleum Industry Bill took almost 20 years before it was finally passed. But this tax reform bill is being transmitted and receiving legislative attention within a week. It should be treated carefully and with caution so that even after our exit, our children will reap its benefits,” Zulum said.

Regional Impact and Concerns

Zulum alleged that the proposed tax reforms are structured in a way that disproportionately disadvantages the North and certain states in the South.

“We condemn these bills sent to the National Assembly. They will drag the North backward and also affect the South East, South South, and some South-Western states like Oyo, Osun, Ekiti, and Ondo,” he remarked.

The governor expressed concerns that some advisers might be misleading President Bola Ahmed Tinubu into believing the North does not support his administration, adding that such claims are unfounded.

“This is not opposition. Based on our understanding, this bill will destroy the North entirely. We call on President Tinubu to review this decision. He secured 60% of his votes from the North. He should not listen to those telling him the North is not supporting him. What we need is the withdrawal of these tax bills,” Zulum urged.

Fiscal and Developmental Implications

Zulum warned that if the bills are passed, Northern states could face severe financial difficulties, hindering their ability to fund essential services and developmental projects.

“If these bills pass, we won’t even be able to pay salaries. And if we do, it won’t be sustainable the following year.

“We are against it, and even Lagos State is against it. If this bill is dragging regions backward, why won’t they rescind it? Our National Assembly members, including some from the South, are not in support of it,” Zulum said.

A Call for Review

Zulum clarified that the opposition from Northern governors and lawmakers is not an act of defiance against the Tinubu administration but a necessary stance to safeguard regional interests.

“This is our position, and it doesn’t mean we are against the government. We supported and voted for President Tinubu. But these bills will not be beneficial to us,” he stated.

Legislative Progress of the Tax Bills

The Senate, on Thursday, passed the tax reform bills for a second reading after deliberation. The bills were subsequently referred to the Committee on Finance, which has been directed to report back within six weeks.

The proposed tax reforms include four bills:

1. The Nigeria Tax Bill 2024: This aims to establish the fiscal framework for taxation in the country.
2. The Tax Administration Bill: It seeks to create a unified legal framework for tax collection and dispute resolution.
3. The Nigeria Revenue Service Establishment Bill: This would replace the Federal Inland Revenue Service Act with the Nigeria Revenue Service.
4. The Joint Revenue Board Establishment Bill: It proposes the creation of a tax tribunal and a tax ombudsman to enhance tax dispute resolution mechanisms.

Governor Zulum’s remarks have added a new layer of debate to the proposed reforms, emphasizing the need for a careful and inclusive review process to avoid undermining regional development.