Until last week, very few Nigerians knew there are words called “Finance Bill”. For some, the only word in their lexicon relating to the budget was “appropriation bill”. The Finance Bill contains provisions about financing the government’s expenditure and it gives effect to the financial proposals made by the government for the upcoming financial year.

Finance Bill largely relates to a change in taxes and levies. Usually introduced once in a year during Budget presentation, Finance Bill proposes some changes to taxes slabs in the budget. The Appropriation Bill specifies the purpose of withdrawing money. It is a bill that authorises the government to withdraw funds from the Consolidated Fund to meet the expenses that it could incur for a financial year.

In essence, whilst Appropriation Bill deals with the expense side of the Budget, the Finance Bill deals with the income (or taxes and levies) side of the Budget. It is easy to seek amendments to the amounts mentioned in the Finance Bill (with respect to reduction or rejection of taxes or levies) but no amendment can be made to Appropriation Bill.

The National Assembly can seek amendments to the amount mentioned in the Finance bill with respect to reduction or rejection of the taxes or levies, however, no amendment can be moved or passed in case of Appropriation bill.

When President Muhammadu Buhari signed the N21.83trn 2023 budget and assent to the 2022 Supplementary appropriation bill on Tuesday January 3rd 2023, not a few were shocked that he deferred the signing of the Finance bill thus raising the debate on what effect his not signing the Finance bill would have on the budget and the economy. The President had directed the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed to liaise with the National Assembly to effect the necessary amendment to the Finance bill.

There have been reservations in some quarters on some of the taxes and levies government was proposing to introduce in the financial year. This development informed why the Finance bill is being reviewed over its fiscal term, particularly as it relates to the Petroleum Industry Act (PIA).

The proposed Finance bill was said to have taken away all concessions given by the PIA. Industry players claim that it does not encourage incentives in the Petroleum sector, leading to massive protest by the International oil Companies (IOC) especially in the area of gas flaring.

In addition, credible sources at both the National Assembly and the Presidency said National Assembly committees handling the Finance Bill injected estraneous 15 diffenerent sections into the bill. For example, the committees brought amendment of Inland Revenue Service transforming to a board,a section to address ICPC Act too and others which are not originally in the bill.

The source said Buhari refused to sign it because as a Finance Bill it has not addressed the core issues of the revenue or expenditure of the country stressing that ;”But the committees failed to address those issues raised rather they wanted to do what will serve their interest.”

Ola Awoniyi, Special Adviser, Media, to the Senate President said why the President did not sign the Finance Bill was explained by the President when he was signing the budget. He said what he knows about the bill was that the President directed the Minister of Finance to meet with the relevant committees of the National Assembly to effect the needed amendment to the bill.

But what effect does the President’s refusal to sign Finance Bill whilst the Appropriation Bill was signed have on the economy?

Whilst some said that it would have negative effect on the economy others claimed that it would have zero effect on the economy. The argument is allowed and often tolerated in Economics.

According to Mr. Peter Adediran, a Chartered Accountant, the argument that withdrawal of President’s signature on Finance Bill will affect the economy is based on the idea that Finance Bill deals with the income side of the budget, and the strict application that ‘it gives effect to the financial proposals made by the government’.

His words; “In the case of Nigeria, what makes up the income side and what proportion comes from taxes and levies? Does not signing Finance Bill terminate collection of taxes and levies at the existing rates? What would be the difference between what could be collected at the new rates if signed and the existing rates as to affect significantly the economy?

Is the Finance Bill not going to be signed at the end of the day?

“Our answers to these questions will determine the side on which the coin of our argument lands”, he stressed.

Dr. Ayo Teriba, an economist said not being a lawyer would not avail him the opportunity to make an informed opinion on the legal implications of not signing the Finance bill , however, he said;” it will be signed eventually. It will become implementable once it is signed”.

For Emeka Chukwuma, an Abuja based business man, Nigerians should exercise some patience and allow the Federal legislators to work with the Finance Minister to arrive at taxes and levies that would not hinder business growth and development.

Alhaji Sheu Gombe, a businessman said not signing the Finance bill is like having a car without an engine. He warned that the economy may be heading for the rocks should those in government fail to do the right thing.