Northern Elders Seek Removal of ‘Ecclesiastical’ From Tax Bills, Propose VAT on Cows

Northern elders advocate for changes to the Tax Reform Bills, urging the removal of ‘ecclesiastical’ provisions and suggesting the inclusion of VAT on livestock, including cows.

The Northern Elders’ Forum (NEF) has called on the Federal Government to halt any action on the proposed Tax Reform Bills, stressing the importance of a more inclusive review process.

In a statement released on Saturday, the NEF called on the Federal Government to replace the term ‘ecclesiastical’ with ‘religious’ in the Tax Reform Bills.

The statement, endorsed by A.M. Al-Amin Daggash, Chairman of the NEF Management Board, presented recommendations for enhancing the proposed tax laws.

While recognizing the wider conversations around tax reform, the group voiced concerns about certain provisions in the bills, especially concerning the exclusion of agricultural products like cows from Value Added Tax (VAT).

The group stated that livestock is a major economic activity in northern Nigeria and warned that its exclusion could negatively impact the region’s economy.

The Northern Elders’ Forum (NEF) has thoroughly examined the details and implications of the proposed Tax Reform Bills. We would like to communicate our deeply principled and patriotic stance on this matter to all Nigerians through this crucial platform, according to their statement.

The NEF criticized efforts to portray the tax reform debate as a North-South matter, emphasizing that input from all six geopolitical zones has enhanced the proposed bills. They advocated for increased dialogue to address concerns and refine the implementation strategy.

The forum consequently offered several recommendations, such as: “1. The Federal Government should halt the hurried implementation of the proposed Tax Reform Bills. Instead, it is advised to engage in dialogue to address concerns and gather valuable contributions from various Nigerian stakeholders before proceeding with a revised timeline for implementing these reforms.”

2). Given that a consumption tax significantly diminishes citizens’ purchasing power, contributes to inflation, and drives up interest rates, there should be no increase in VAT until clear evidence of the promised economic recovery by the government emerges on the national horizon.

3). The proposed formula in the NTAB is considered unfair to states where VAT revenue originates, as it denies consuming states credit for their contributions. Given that VAT functions as a General Consumption Tax (GCT), the attribution rule based on consumption location should be applied consistently across all regions.

4). Given that Section 162(2) of the amended 1999 Constitution authorizes the RMAFC as the sole body to establish a formula for fair revenue distribution among the three tiers of government, any attempt by those in power to arbitrarily modify this provision should be avoided. Such actions could undermine national law and show disregard for democratic principles.

The proposal to transition highly successful developmental and technological institutions like TETFund, NITDA, and NASENI from a steady sustainability model to the unpredictable nature of budgetary allocations should be discontinued. We firmly suggest that the government maintain their current structure in order to safeguard and fortify these vital national entities.

5). Considering our diversity and the government’s emphasis on promoting financial inclusion, terms like “ecclesiastical” in the originally proposed Tax Reform Bills should be smoothly replaced with “religious.”

6) Religious and charitable organizations, as well as family inheritance wealth, should be exempt from all forms of taxation. This is because imposing taxes on them may lead to conflicts due to citizens’ strict adherence to certain religious obligations.

7) Noticeably absent and deliberately overlooked in the Tax Reform Bills is the issue of agricultural goods (produce) and livestock, a significant ecosystem that forms the backbone of Northern Nigeria’s economy. For some unexplained reasons, these have been declared VAT-exempt or non-VATable. Clearly, this exclusion has an evidently disproportionate impact on Northern Nigeria.