Sharia Council, Yadudu Reject Proposed Inheritance Tax, VAT Hike
Prominent Islamic organizations, religious leaders, and legal experts have strongly opposed the proposed inheritance tax and an increase in Value Added Tax (VAT) included in Nigeria’s new tax reform bills.
During a public hearing convened by the House Committee on Finance at the National Assembly Complex on Wednesday, the Supreme Council for Shariah in Nigeria, the Committee of FCT Imams Initiative, Kano State Government, and constitutional law expert Professor Auwalu Yadudu expressed their concerns over the potential impact of the tax reforms on religious and state autonomy.
The hearing addressed four key bills: the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, the Joint Revenue Board Bill, and the Nigeria Tax Bill, all of which have passed a second reading in the National Assembly.
Representing the Sharia Council, Professor Ahmed Bello Dogarawa acknowledged the importance of tax reforms but firmly rejected the proposed inheritance tax, arguing that it contradicts Islamic law and religious practices. He called for the removal of Section 4(3) Part 1, Chapter 2 of the Nigeria Tax Bill, emphasizing that taxing inheritance would create unnecessary legal disputes and infringe on religious rights.
Similarly, the FCT Imams Initiative, led by Dr. Umar Aliyu, opposed taxation on religious institutions, warning that it could hinder their ability to provide essential community services. The group also rejected any VAT increase, advocating instead for a reduction from 7.5% to 5%.
The Kano State Government supported the broader tax reforms but raised concerns over provisions that could limit state autonomy. Mahmud Sagagi, who represented the state at the hearing, emphasized the need to ensure tax modernization does not compromise states’ constitutional rights.
Professor Yadudu also criticized certain provisions in the bills, particularly the use of a “supremacy clause,” which he argued could challenge the Nigerian Constitution. He further contended that the National Assembly lacked the authority to create tax boards for states and local governments, urging that the proposed Nigerian Revenue Service board should include representatives from all 36 states and the Federal Capital Territory (FCT) to uphold federal principles.
As the debate over the tax reform bills continues, religious leaders and state representatives are urging lawmakers to reconsider sections that could have far-reaching implications for faith-based organizations and state governance.
