Tax Reform Bill

By Haruna Chiroma

The tax reform bill is currently stirring controversy. It poses a severe threat to the growth of information and communication technology (ICT) in Nigeria, as it proposes to terminate funding for the National Information Technology Development Agency (NITDA) by 2027. When I first read this shocking news in the newspapers, I was compelled to investigate further. A section of the bill explicitly states, “National Information Technology Development Fund: 20% in 2025 and 2026 years of assessment, and 0% in 2027 and thereafter.” This provision indicates a progressive reduction of NITDA’s funding until complete withdrawal by 2027. At a time when nations worldwide are significantly increasing their investments in technology to drive innovation and economic growth, Nigeria’s decision to defund its premier ICT development agency is deeply concerning.

Globally, governments play a pivotal role in funding and coordinating computing technological advancements through agencies like NITDA. Leading examples include the U.S., where El Capitan, the most powerful supercomputer with over 11 million processors, is hosted at the Lawrence Livermore National Laboratory with government funding. Similarly, Japan’s Fugaku supercomputer, Italy’s Leonardo supercomputer at the Interuniversity Consortium for Automatic Computing of North-East Italy, and China’s Sunway Taihulight supercomputer at the National Supercomputing Center are all funded and maintained in millions of dollars by their respective governments. These centres drive artificial intelligence (AI), climate research, and national security breakthroughs.

Nigeria’s move to stop NITDA’s funding undermines its ability to establish comparable infrastructure, potentially sidelining the nation in the global race for technological leadership, especially in this era of AI boom. NITDA needs a significant increase in government funding, not a reduction or cessation of funding. This support is essential for transitioning from its current focus on providing basic systems with internet connectivity to delivering advanced computing infrastructure. 

The NITDA has been instrumental in providing IT infrastructure to tertiary institutions and centres across Nigeria, aiming to enhance hands-on experience with technology. While this initiative has made IT resources more accessible, its impact has been limited due to the basic nature of the infrastructure provided. NITDA often delivers facilities such as buildings with basic computing devices and internet connectivity.

Although helpful, this approach falls short of addressing the advanced needs of tertiary institutions, which should be hubs for high-impact research, innovation, and technological development. The computers provided in institutions should have at least one server with 4 GPUs, multi-GPU systems, Dual GPU Xeon W-2400, and advanced workstations capable of running 70 billion parameter models. Such limited interventions fail to prepare Nigeria to lead Africa in technological advancements and global IT competitiveness.

Tertiary institutions are critical for pioneering research and fostering innovations that drive national development. However, the resources provided by NITDA rarely go beyond basic systems, leaving institutions ill-equipped to conduct groundbreaking research or develop cutting-edge technologies. High-impact research requires advanced state-of-the-art computing infrastructure, advanced software tools, and specialized facilities, all of which are currently lacking. As the “Giant of Africa,” Nigeria should empower its higher education system with resources to catalyze technological breakthroughs, enabling the country to lead in global innovation. Unfortunately, the limited scope of NITDA’s current offerings restricts this potential.

Rather than addressing these shortcomings, the proposed tax reform bill aims to phase out budget allocations for NITDA by 2027. This move is a significant setback for a developing nation that aspires to secure a place on the global technology map. Eliminating funding for NITDA would exacerbate the already inadequate IT infrastructure in tertiary institutions, undermining efforts to equip students with the skills needed for the Fourth Industrial Revolution. It would also signal a lack of commitment to nurturing a robust ecosystem for research and innovation, essential for long-term economic growth.

Increasing funding for NITDA is crucial to ensure it can provide an infrastructure capable of supporting advanced research and development. By investing in high-performance computing clusters, research laboratories, and innovation hubs, NITDA could transform tertiary institutions into true centres of excellence. Such investments would enhance education quality, foster industry partnerships, and attract global attention to Nigeria’s technological capabilities. These steps are necessary to empower students and researchers to develop solutions that address local and global challenges.

The NITDA should refocus its efforts from constructing buildings to investing solely in advanced IT infrastructure and power solutions. Beneficiary institutions can provide the necessary physical space, allowing NITDA to channel its budget toward cutting-edge computing systems and robust power setups essential for research and development. This shift would maximize resources and provide institutions with tools to foster innovation, invention, and impactful research and development.

NITDA’s approach should prioritize building supercomputers with at least 400,000 processors (mostly accelerators) capable of handling complex computations and simulations required for high-impact research. Additionally, data centre storage units with capacities in petabytes should be established to support the growing demand for data-driven research and AI training models.

Cybersecurity infrastructure must be provided in the relevant institutions equipped to monitor Nigeria’s cyberspace, conduct advanced forensic investigations, innovate, research, and defend against cyber threats. This holistic approach would create a technological ecosystem capable of addressing the needs of both academia and the nation, bridging the gap between research, innovation, and real-world applications.

Rather than building and distributing basic computing devices across institutions, which provide limited value, NITDA should aim to establish at least one high-performance computing and cybersecurity centre in Nigeria’s six geopolitical regions. Establishing high-performance computing centres in each region is a strategic move that could transform the nation’s technological and research landscape. These centres would serve as centralized hubs for cutting-edge computation, enabling tertiary institutions and regional research bodies to access advanced resources essential for high-impact research, innovation, invention and technology development.

These centres would empower researchers and students to engage in frontier areas such as AI, climate modelling, biotechnology, and space exploration by providing access to supercomputers with thousands of processors, vast petabyte-scale data storage facilities, and state-of-the-art cybersecurity infrastructure.

To ensure sustainability and efficiency, these HPC centres should be supported by reliable power infrastructure, skilled personnel, and strategic funding models. Power-intensive facilities like these require an uninterrupted energy supply, which could be addressed through investments in renewable energy solutions such as solar farms or microgrids.

Haruna Chiroma, a University Professor of Artificial Intelligence, wrote from the University of Hafr Al Batin, Saudi Arabia, via freedonchi@yahoo.com.

By Uzair Adam

The Presidency has dismissed concerns that the proposed tax reform bills currently before the National Assembly will impoverish northern Nigeria or disproportionately favor Lagos and Rivers states.

In a statement issued on Monday, presidential spokesperson Bayo Onanuga emphasized that the reforms are designed to improve the quality of life for all Nigerians, particularly the disadvantaged, by simplifying tax administration and fostering a better business environment.

The statement addressed apprehensions raised by Borno State Governor Babagana Zulum, who had suggested that the proposed Value Added Tax (VAT) sharing formula could be skewed in favor of Lagos and Rivers states.

Onanuga, however, described these concerns as unfounded and based on misinformation.

“The tax reform bills will not make Lagos or Rivers states wealthier at the expense of other regions, nor will they lead to the economic marginalization of any part of the country,” Onanuga stated.

He urged Nigerians to reject any attempt to polarize the nation over the proposed legislation.

Onanuga also clarified that the bills do not seek to abolish key federal agencies such as the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), or the National Information Technology Development Agency (NITDA), which will continue to receive funding through budgetary allocations.

The spokesperson reiterated that President Bola Tinubu’s fiscal policy reforms aim to ease the tax burden on businesses, streamline tax collection, and support national development.

Meanwhile, former Speaker of the House of Representatives Yakubu Dogara called on Northern leaders to approach the tax reform bills pragmatically rather than with ethnic or religious sentiments.

Speaking during a Channels Television town hall in Abuja on Monday, Dogara stressed the importance of prioritizing the region’s future development.

“We Northern leaders must set aside ethnicity and religious biases and focus on the realities these reforms will bring,” Dogara said.

He also criticized senators who claimed there was insufficient consultation on the bills, questioning their own legislative practices.

“How often do they consult the public when making laws? Some state laws are drafted in governors’ living rooms,” Dogara remarked, dismissing the argument that public opinion outweighs the potential impact of the reforms.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal and Tax Reforms, explained that the bills aim to empower subnational governments to enhance revenue generation and achieve fiscal self-sufficiency.

By Abdullahi Mukhtar Algasgaini

Senator Orji Kalu, who represents Abia North at the upper legislative chamber has revealed that the federal government made a mistake not to have carried the National Executive Council, Nigeria Governor’s Forum, and the Council of State along in its tax reform bills.

Kalu disclosed this on Monday in an interview with Arise Television on the controversial tax reform bills.

Recall that Senator Mohammed Ali Ndume, the Northern Governor’s Forum, the National Economic Council, and others have openly opposed the tax reforms.

However, Orji noted that the bills are very progressive and would bring back fiscal federalism in Nigeria.

Meanwhile, he faulted the initiators of bills for not carrying key stakeholders along saying, “As I told you before, the bill is very progressive. It will bring back fiscal federalism. Many senators have not been briefed. I think the federal government made a mistake. The initiators of the bills would have briefed the National Economic Council, Governors’ forum”.

Recall tax reform bills, including the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, were sent to the National Assembly for passage since October 2024.

The bills gained momentum last week when they secured second-reading passage at the Senate.

This comes after the Northern Governor’s Forum and National Economic Council called for the bill’s withdrawal.

Meanwhile, DAILY POST reports that economic experts have backed the tax reform bill on the grounds that it will boost Nigeria’s revenue.

However, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee had earlier in his contributions, explained why the tax bills generated so much controversy.

By Bilyamin Abdulmumin, PhD

Passing bills in Nigeria (and apparently everywhere else) has a tradition of generating controversies. For instance, the Petroleum Industry Act (PIA) endured decades of rejection before finally passing into law. When the Electoral Act 2022 was signed into law, the opposition went agog, crying to high heaven. Similarly, when the Social Media Bill was passed, it was seen as proof of a government obsession with suppressing dissent.

The reform that is now raising the dust is the Tax Reform Bills. Days after sending the bills to the national assembly, the nineteen governors of the northern states convened in Kaduna to oppose them, describing them as anti-North. The Federal Executive Council (FAC) also backed the northern governors. However, like the vigour with which subsidy removal was pursued, the president insisted on proceeding with the reform.

Northern governors fear amending VAT to a derivation-based model will diminish their states’ revenue contributions. Governor Yahya, the NGF chairperson, notes that companies remit VAT based on their headquarters, not where goods and services are consumed. Consequently, while MTN services consumed in Kano generate VAT for Lagos, Kano’s allocation decreases despite the consumption.

This reform is a dream come true for the state where the plants and industries are sited; unfortunately, for the state’s bottom rock in terms of industries, it is a crying face to them.

 While seeking redress to the proposed bill, it is also better to take charge; no more time is needed for the North to dust off all the moribund infrastructure, pass and implement industrial policies, continue with the uncompleted, and maintain the few industries in the region than now. 

There are plenty of them in Kano; notwithstanding Karota revenue, Abba Kabir Yusuf needs to rise to industrious revenues. Dangote’s Tomato processing industry is said not to be meeting expectations and optimism.

In Zamfara, a once peaceful and serene area, Dauda Lawal needs to recall all the companies aground and those existing only in paper, e.g., fertiliser plants by his predecessor Mutawalle. Apart from raising revenue, industrialisation benefits in Zamfara are numerous, combating even the insecurities that bedevil the state (through job opportunities in the long run).

In Kaduna, Uba Sani needs to continue with the Malam El-rufai’s exploit, maintaining and upgrading Olam Nigeria and a host of economic initiatives.

In Kebbi state, the comrade Dr. Nasir Idris Kauran Gwandu needs to extend his widely recommended administration to continue the ongoing legacies of  Senator Abubakar Atiku Bagudu, like the bioethanol mega plant, maintaining and promoting already established ones ( e.g., GB Food tomato processing plant and WACOT). 

Ironically, the southern states (especially the west), where the proposed bill is set to favour, are upping the ante. Lagos, for instance, is making unprecedented investments in energy generation.

The interest in remodelling the proposed Tax Reform Bills is not enough; it is a wake-up call for the North to raise the bar regarding regional industrialisation.

Bilyamin Abdulmumin, PhD, wrote via bilal4riid13@gmail.com.

By Uzair Adam 

Governor Babagana Umara Zulum of Borno State has expressed strong opposition to the tax reform bills introduced by President Bola Ahmed Tinubu’s administration, cautioning that their implementation could significantly harm the northern region.

The controversial bills, which propose shifting the basis for Value Added Tax (VAT) distribution to the location of consumption, have sparked widespread resistance, particularly in the north. 

Key stakeholders, including northern governors, traditional rulers, and the Northern Elders Forum, have called for the withdrawal of the proposed legislation.

Speaking with BBC Hausa, Zulum criticized the rapid progress of the bills through the National Assembly, contrasting it with the protracted passage of other critical legislation, such as the Petroleum Industry Bill, which took nearly two decades to become law.

“We condemn these bills. They will set the north back and affect other regions, including some states in the South West like Oyo, Osun, Ekiti, and Ondo,” Zulum said. 

“This is not mere opposition; it is about safeguarding our future. We urge President Tinubu to reconsider. 

“He received substantial support from the north during the election, and our interests must be protected.”

Zulum warned that the financial strain imposed by the reforms could make it difficult for many northern states to pay salaries, adding, “Even if we manage to pay, it won’t be sustainable in the following year.”

When asked if the bills would exacerbate poverty and insecurity in the north, the governor affirmed, “Yes, it will. This isn’t just about the north; even Lagos is concerned. If so many regions are against these bills, why push forward without careful consideration?”

Zulum also addressed speculation about lawmakers being influenced by lobbying or kickbacks. 

“There are rumours, but we cannot be sure. What we need is patriotism. We have children, grandchildren, and relatives in rural areas. We must avoid endorsing policies that would hinder their progress.”

While emphasizing that his stance is not an act of defiance against the federal government, Zulum maintained that it calls for a more thoughtful approach. 

“We supported and voted for President Tinubu, but these bills are not in our best interest. We are simply asking for a reconsideration to protect the future of our people and the nation at large.”

By Abdullahi Sulaiman

The Concerned Academics Forum (CAF) has rejected the proposed tax reform bills under consideration by the National Assembly. In a letter to Senate President Godswill Akpabio, CAF warned of the socio-economic repercussions, calling them regressive and harmful to ordinary Nigerians.

According to the letter, the proposed bills disproportionately burden low- and middle-income earners through increased direct and indirect taxes. CAF argues that this would exacerbate poverty, raise living costs, and stifle economic growth, particularly in the informal sector.

The forum expressed disappointment over the lack of adequate social safety nets to cushion vulnerable citizens from the impact of these reforms. They also criticised the government for its insufficient efforts to address tax evasion and systemic corruption, calling instead for greater enforcement of existing tax laws.

Furthermore, CAF highlighted concerns about the adverse effects the tax reforms could have on education and research, warning of reduced funding for public universities and limitations on academic progress.

In their letter, CAF outlined key recommendations, including the adoption of a progressive taxation system, stronger measures to combat tax evasion, efficient use of public funds, and prioritisation of essential public services like healthcare and education.

The forum urged lawmakers, civil society organisations, and Nigerians at large to reject the proposed reforms and advocate for a more equitable and inclusive tax structure.

CAF’s position reflects its commitment to advancing social justice and economic sustainability in Nigeria. The group has called for a consultative approach to policy formulation that engages diverse stakeholders to ensure fairness and inclusivity.

The debate over the proposed tax reforms remains contentious. Various sectors express concerns about their potential impact on the Nigerian populace.