*Northern Governors Rally to Defend VAT Model, Demand Equitable Distribution *President Tinubu Pledges Fair Play: New Tax Bills Aim to Strea...
*Northern Governors Rally to Defend VAT Model, Demand Equitable Distribution
*President
Tinubu Pledges Fair Play: New Tax Bills Aim to Streamline Revenue Nationwide
*Traditional
Leaders Join the Dialogue: Sultan of Sokoto Supports Fair Reform Amid Rising
Tensions
By Ammar. Rajab
In response to concerns and potential
misunderstandings surrounding Nigeria’s recent tax reform proposal, the
presidency has emphasized that the proposed tax legislation aims to benefit all
regions, including northern states. This assurance comes amid opposition from
the Northern Governors’ Forum regarding the proposed derivation-based VAT
(Value-Added Tax) distribution model.
Northern
Governors’ Opposition to VAT Reform
At a meeting in Abuja, Northern governors, under the
leadership of Gombe State Governor and Northern Governors’ Forum Chairman,
Muhammad Inuwa Yahaya, expressed reservations about the proposed VAT
distribution model, which would alter how tax revenue is allocated across
Nigeria. Attendees included traditional rulers, such as the Sultan of Sokoto,
His Eminence Muhammadu Sa’ad Abubakar III, who offered his support for fair,
transparent reforms.
The opposition stems from fears that the new VAT
model might negatively impact states with fewer taxable industries. Presently,
VAT allocation is based on where the tax is remitted rather than the location
of consumption or production.
In response to these concerns, the presidency,
through the Special Adviser on Information and Strategy, Bayo Onanuga, released
a statement clarifying the intent of the reforms. He emphasized, “We must
address the misunderstandings around the administration’s tax reform agenda.”
Objectives
of the New Tax Reform Bills
The administration has introduced four major tax
bills, signed by President Bola Tinubu, to streamline Nigeria’s tax system and
promote equity in revenue distribution without increasing tax burdens. These
bills include:
Nigeria Tax Bill: Aims to eliminate multiple
taxation, simplify obligations, and make Nigeria more business-friendly.
Nigeria Tax Administration Bill (NTAB): Standardizes
tax administration across all levels of government to improve compliance.
Nigeria Revenue Service (Establishment) Bill:
Renames the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue
Service (NRS), underscoring its role as a nationwide revenue agency.
Joint Revenue Board Establishment Bill: Establishes
a Joint Revenue Board to coordinate federal and state tax operations and
introduces a Tax Ombudsman to resolve taxpayer issues.
Onanuga underscored that these bills aim to optimize
and simplify existing tax structures rather than increase tax rates or create
additional tax obligations. “The tax rates remain unchanged. Our reforms seek a
fairer distribution without further burdening Nigerians,” he said.
Derivation-Based
VAT Model: A Point of Contention
The derivation-based VAT distribution model has
sparked intense debate, with Northern governors arguing that this approach may
disadvantage states lacking taxable industries. They urged the National
Assembly to reject any bill that could marginalize northern states or compromise
their fiscal stability.
“This model relies on where services are consumed,
not on the location of company headquarters where VAT is remitted,” Yahaya
noted in a statement, urging equitable policies that reflect the needs of all
regions.
Economic
Hardships and Regional Disparities
Addressing the country’s economic challenges, Yahaya
emphasized that hardship is felt more acutely in the North due to higher
poverty and limited industrial activity. Acknowledging citizens’ frustrations,
he advised patience as federal and state governments work on measures to
alleviate these hardships. The economic disparity between North and South, he
said, “requires immediate policy intervention and fiscal sensitivity.”
Traditional
Leaders Support Reforms
The Sultan of Sokoto emphasized the vital role of
traditional institutions in fostering security and promoting social reforms. He
noted that the ongoing issues of out-of-school children and the Almajiri system
are critical challenges requiring immediate action.
“Educating our youth is essential for their future
and the future of the nation,” he remarked, pledging traditional leaders’ commitment
to working with the Northern Governors Forum.
Broader
Implications of the Reforms
Beyond revenue distribution, the proposed reforms
aim to foster economic growth, improve job creation, and stimulate a dynamic
economy. The administration contends that simplifying the tax system will
create opportunities for investment and development across all states,
contributing to national unity. Onanuga concluded, “President Tinubu’s reforms
are meant to benefit Nigerians across all regions, not to disenfranchise any
group.”
Northern
Governors and Traditional Leaders Call for Federal Collaboration
At a recent meeting in Kaduna, governors from 19
northern states gathered alongside prominent traditional rulers to discuss
pressing socio-economic issues. This assembly, part of the Northern States
Governors’ Forum’s initiative, highlighted regional challenges such as
insecurity, poverty, and education deficits. The forum also addressed recent
disruptions in electricity supply caused by vandalism of infrastructure and emphasized
the need for robust energy solutions to alleviate ongoing hardship.
Governors in attendance included Uba Sani (Kaduna),
Dauda Lawal Dare (Zamfara), Abdullahi Sule (Nasarawa), Babagana Zulum (Borno),
Bala Mohammed (Bauchi), and others, with the meeting held at Sir Kashim Ibrahim
House. Traditional rulers such as the Shehu of Borno, the Emir of Zazzau, and
the Etsu Nupe also participated, voicing their concerns and proposed solutions.
In a communiqué, the Northern Governors Forum
reiterated its call for equitable policy implementation, particularly
concerning VAT distribution. They urged that no geopolitical zone should be
disadvantaged by national policies.
Additionally, they advocated for an increased role
of traditional institutions in tackling issues like banditry, kidnappings, and
communal clashes. The forum commended Chief of Defence Staff General
Christopher Musa for his efforts to improve national security.
Security
and Economic Development Initiatives
Governor Sani of Kaduna State, hosting the forum,
highlighted the importance of addressing both security and development needs.
He lauded the federal government’s recent security initiatives, such as
Operation Fansan Yamma, aimed at addressing terrorism and criminal activity in
the region. Sani called on northern leaders to prioritize education, skill
development, and job creation as key strategies to reduce youth restiveness.
Moreover, the forum resolved to support agricultural development, including providing farmers with access to financing, infrastructure, and modern techniques. The governors stressed that agriculture should serve not only as a means of food security but as a driver for industrialization and economic growth across the region.
Addressing
Almajiri and Out-of-School Children
The Sultan of Sokoto reiterated the importance of
addressing the Almajiri system and the high rate of out-of-school children in
northern Nigeria. He urged state governments to prioritize education,
underscoring that addressing this issue is vital for social stability and
long-term development. “Educating our youth gives them the freedom to
contribute meaningfully to society,” he said.
A
Call for Collaboration and Sustainable Solutions
The Northern Governors Forum concluded by calling
for collaborative efforts with the federal government and other agencies to
address regional challenges.
The forum recognized the potential for growth within
northern Nigeria’s agricultural sector and emphasized the need for targeted
social welfare programs to alleviate the hardships currently experienced by the
population. Additionally, they advocated for a strategic approach to
infrastructure development, particularly in energy, to improve the resilience
and connectivity of northern states.
Moving
Forward
The presidency’s assurance, combined with the
Northern Governors Forum’s commitment to dialogue, reflects the growing
necessity for a unified approach to Nigeria’s tax reforms. As the National
Assembly reviews these bills, the administration remains optimistic about
achieving a balanced reform that aligns regional needs with national economic
objectives.
President Tinubu has urged lawmakers to prioritize
these bills, emphasizing that a streamlined tax system is essential for
generating revenue to fund critical development projects across the country.
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