RMAFC Opposes Tax Reform Bills Over ‘Constitutional Breaches’

The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has strongly opposed the tax reform bills proposed by President Bola Tinubu, which are currently under review by the National Assembly. RMAFC raised concerns about potential constitutional violations in a detailed nine-page memorandum.

In the document, signed by RMAFC Chairman Mohammed Bello Shehu, the Commission argued that the proposed bills infringe upon the Constitution, particularly Section 162(2) of the 1999 Constitution (as amended), which grants RMAFC exclusive authority over determining revenue allocation formulas among the federal, state, and local governments. The Commission stressed that no legislation, including the VAT Act, has the right to alter or bypass its mandate, deeming such actions unconstitutional.

RMAFC emphasized that its role in ensuring fair revenue distribution is central to maintaining justice and equity in the country’s fiscal structure. The memorandum pointed out that any attempt to sidestep RMAFC’s responsibilities could undermine its integrity and affect the fairness of the revenue-sharing system.

The Commission also proposed a new VAT allocation formula, taking into account the consumption-based nature of VAT, to ensure an equitable distribution of resources. It called for the federal government to empower RMAFC to finalize a VAT allocation framework, asserting that all allocations should strictly adhere to its constitutional mandate rather than relying on arbitrary provisions in the proposed tax reforms.

In its recommendations, RMAFC suggested that the government engage in dialogue with all tiers of government to secure agreement on the new formula. It also advocated for measures to improve VAT collection transparency, such as electronic invoicing, to ensure accurate tracking of VAT payments from consumers.

RMAFC concluded that the tax reform bills, as currently proposed, could disrupt national unity and constitutional balance. It urged all parties involved to respect its constitutional role in fiscal matters, to uphold fairness, and ensure proper revenue allocation across the three tiers of government.