The Bola Ahmed Tinubu [/b]administration is set to withdraw the recently submitted Tax Reform Bills from the National Assembly, just two months after their introduction. This decision marks a significant shift in the government's approach to tax legislation amid growing concerns from various stakeholders.
This decision follows significant backlash and controversy, mainly from northern governors and traditional rulers who oppose aspects of the proposed legislation, particularly the distribution model for Value Added Tax (VAT). The northern leaders expressed their dissatisfaction with how the proposed changes could potentially disadvantage their regions economically, prompting them to voice their concerns through official channels.
Sources informed Daily Trust that the presidency has agreed to retract the bills, though they will likely be revised and resubmitted to the National Assembly at a later date. This retraction suggests that the administration is willing to engage with the concerns raised and seek a more inclusive approach to tax reform in Nigeria.
On October 31, the National Economic Council (NEC), led by Vice President Kashim Shettima, officially recommended the withdrawal of these bills. This recommendation aligns with a resolution passed by governors from Nigeria’s 19 northern states during a meeting in Kaduna, where, joined by influential traditional leaders, they voiced concerns that the new tax proposals could adversely affect the region’s economic position. The collaborative efforts of these leaders reflect a unified stance on the matter, highlighting the need for equitable tax policies.[/p>
The opposition from northern leaders centers around proposed amendments to the VAT distribution model, which, they argue, would disadvantage the North. They contend that the current model does not adequately reflect the realities of consumption patterns across the country, thus perpetuating economic disparities between regions.[/p>
Gombe State Governor Inuwa Yahaya, chair of the Northern Governors’ Forum, clarified their stance, explaining that the current VAT system unfairly favors states where businesses are headquartered rather than the regions where products and services are actually consumed. This situation, they contend, undermines the economic balance and short-changes subnational regions, especially in the North, which plays a crucial role in supplying goods and services nationwide.[/p>
In a communiqué issued at the close of their meeting, the northern leaders called for equity in all national policies, asserting that they are not opposed to reforms that benefit Nigeria as a whole. However, they believe the proposed amendments must be fair and inclusive to avoid marginalizing specific regions. This highlights their commitment to advocating for a balanced approach to governance that considers the interests of all Nigerians, regardless of their geographic location.[/p>
During a media briefing, Oyo State Governor Seyi Makinde explained that NEC’s recommendation reflects an understanding of the widespread concerns and a desire to allow more comprehensive consultations. This approach signifies the administration's recognition of the importance of stakeholder engagement in the legislative process.[/p>
Flanked by Governors Charles Soludo (Anambra) and Babagana Zulum (Borno), Makinde stated that NEC sees the need to align all stakeholders on the tax reforms and to build consensus across Nigeria. Such collaborative efforts are essential for ensuring that any proposed changes to tax policy are met with broad support and understanding from various factions within the country.[/p>
Governor Zulum reiterated that NEC’s decision aims to facilitate a more unified approach, stressing the importance of giving citizens and stakeholders clarity on the administration’s vision for tax reform. This emphasis on transparency and communication is critical in fostering trust between the government and the populace.[/p>
Earlier, Bayo Onanuga, Special Adviser to the President on Information and Strategy, addressed the misunderstandings surrounding the bills. He emphasized that the proposed VAT derivation model, rather than disadvantaging the North, intends to create a more balanced system that benefits all regions equally.[/p>
The bill seeks to shift VAT distribution to a model that considers the location of consumption, ensuring that regions producing goods for nationwide use receive fair compensation. This proposed change reflects an effort to rectify the perceived imbalances in the current system and promote economic equity across Nigeria.[/p>
According to Onanuga, “The current model favors VAT remittance based on corporate headquarters, not where goods are consumed. The proposed reform would ensure that all regions, particularly those in the North supplying essential products, are fairly represented in VAT allocations.” This statement reinforces the administration's commitment to creating a fairer and more equitable tax system for all Nigerians.