In response to recent concerns raised by the Northern Governors’ Forum regarding proposed tax reform bills, the Presidency has asserted that these initiatives are aimed at enhancing national efficiency rather than targeting any specific region.
The governors, led by Gombe State Governor Muhammed Inuwa Yahaya, had voiced their opposition during an October 28, 2024 meeting.
They expressed apprehensions about a new derivation-based model for Value-Added Tax (VAT) distribution.
However, the presidency has clarified that these reforms will benefit all states across Nigeria.
Special adviser to President Bola Tinubu, Bayo Onanuga, explained that the reforms are “not against the North” but are intended to optimise the country’s tax system.
“These initiatives emerged from a comprehensive review of existing tax laws to enhance efficiency and eliminate redundancies,” Onanuga stated, even as he reinforced the administration’s commitment to a fair tax structure.
The proposed reforms, currently under consideration by the National Assembly, consist of four key bills designed to modernise Nigeria’s tax landscape.
The first, the Nigeria Tax Bill, aims to eliminate unintended multiple taxation and simplify tax obligations for businesses and individuals nationwide.
The second, Nigeria Tax Administration Bill (NTAB), proposes new rules to harmonise tax administrative processes across federal, state, and local jurisdictions.
The third, Nigeria Revenue Service (Establishment) Bill, seeks to rename the Federal Inland Revenue Service (FIRS) the Nigeria Revenue Service (NRS), reflecting its role as the revenue agency for the entire federation.
While the fourth, the Joint Revenue Board Establishment Bill, proposes the creation of a Joint Revenue Board and an Office of Tax Ombudsman to address taxpayer complaints.
Onanuga clarified that “the reforms will not increase the number of taxes” but will instead streamline existing frameworks, and that “tax rates or percentages will remain the same.”
He assured that the changes were designed to support a growth-oriented economy and would not lead to job losses but rather “stimulate new avenues for job creation.”
Critics have expressed concerns over the proposed derivation-based VAT distribution model, but the presidency emphasised that the reforms are designed to correct existing inequities.
“The current VAT distribution model is flawed,” Onanuga explained, as it is based on where taxes are remitted rather than where goods are consumed.
The new model, he said, will consider the location of supply and consumption, ensuring that states that produce essential goods do not miss out on tax revenues simply because their products are VAT-exempt.
The presidency urged the National Assembly to consider these critical reforms, which are essential for improving tax efficiency and addressing all Nigerians’ developmental needs.
“These reforms are meant to improve the lives of Nigerians and will not undermine any part of the country,” Onanuga stated.
Withdraw Bills Now, NEC Tells Tinubu
However, the National Economic Council (NEC) has recommended withdrawing the current Tax Reform Bill from the National Assembly to facilitate more comprehensive consultation and consensus-building among key stakeholders.
Making the recommendation in response to a presentation by the chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr Taiwo Oyedele, the Council called for more extensive consultation with stakeholders to align on the far-reaching impacts of the proposed tax reforms.
This comes just as Vice President Kashim Shettima announced that NEC will adopt measures to speed up the decentralisation of the national grid, with a view to putting an end to the incessant collapse that has plunged some states in the North in total darkness.
In a statement by his spokesman, Stanley Nkwocha, the vice president listed some of the measures for the decentralisation of the national grid, including the establishment of mini-grids and renewable energy sources like solar photovoltaic and wind turbines.
Speaking at the 145th NEC meeting on Thursday at the Presidential Villa, Abuja, Shettima, the chairman of the NEC, said the burden of accountability has compelled the government to never look away from these issues.
He stressed the urgent need to implement the Nigeria Energy Sector Implementation Plan (NESIP), emphasizing that the energy sector must embrace renewable energy’s potential and leverage solar and mini-grid solutions designed to meet regional electricity demands.
The VP said, “A robust economy is the backbone of every nation. The recent blackouts caused by the actions of vandals remind us of our urgent need to expand our energy infrastructure. I believe the governors here would agree that the decentralisation of electricity is our path forward.
“We will continue to promote the constitutional framework that empowers constituent states within the Nigerian federation to generate, transmit, and distribute electricity in areas covered by the national grid. Together, we can make instability a relic of the past.”
He urged Nigeria to capitalise its diverse regional energy resources—from northern Nigeria’s solar potential to the south’s gas reserves – to build a resilient, decentralised energy system that drives growth and empowers our communities.
The Vice President also said the tax reforms initiated by President Bola Ahmed Tinubu’s Administration will broaden the nation’s revenue base, foster economic stability, and diminish dependency on specific sectors.
The minister of finance and coordinating minister of the economy, Mr. Wale Edun, briefed the Council on several key national accounts.
According to his report, the Excess Crude Account stands at $473,754.57, the Natural Resources Fund at N26,105,837,627.67, and the Stabilisation Account at N36,299,452,763.62.
There Is Hunger In The Land – Governors
The 36 state governors under the aegis of the Nigeria Governors’ Forum (NGF) have said they know that the people they rule are hungry.0:00 / 1:00
Rising from a meeting in Abuja that lasted from Wednesday night to the early hours of Thursday, the governors, while sympathising with Nigerians, said that they appreciate the reforms being carried out by President Bola Tinubu.
Speaking with journalists at the meeting, Governor Hope Uzodinma of Imo State disclosed that the governors prayed that “as soon as possible, the relief we are looking for should come so that we can begin to leverage the benefits of the reforms and then have a betterment general.”
“We sympathise with our people. We support them. We know that there is hardship in the country. We also appreciate the reforms being carried out by the President,” he said.
