Afenifere, governors differ on Tinubu’s tax reform

Pan-Yoruba socio-cultural and socio-political organisation, Afenifere, has said the tax reform proposed by the Federal Government has potential benefits, even as the Nasarawa State Governor, Abdullahi Sule, has said that northern governors disagree with an aspect of the reform that has to do with the removal of Value Added Tax (VAT) from the federation allocation.

Afenifere, in a statement by its National Publicity Secretary, Jare Ajayi, noted that no region in the country should entertain any fear regarding the distribution of the proceeds of VAT as being proposed.

Recall that the Federal Government recently submitted four bills to the National Assembly for passage into law. According to the government, the bills are “aimed at streamlining Nigerian Tax Administrative processes; enhancing efficiency and eliminating redundancies across the national tax operations”.

The bills are: Nigeria Tax Bill; Nigeria Tax Administration Bill; Nigeria Revenue Service (Establishment) Bill, which seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service; and the Joint Revenue Board Establishment Bill.

Some citizens expressed reservations about the proposed bills, especially the one on Value Added Tax (VAT). Northern State Governors’ Forum (NSGF) and Northern Council of Traditional Rulers and Chiefs had, at their joint meeting in Kaduna, on Monday, October 28, expressed displeasure on the bill, particularly the aspects concerning the derivation-based model for VAT distribution among the country’s federating units.

But the pan-Yoruba organisation argued that using or including ‘derivation’ as a factor of distribution would not deprive the Northern states or any other state what would be due to them.

“Since people consume items and patronise services in every state, there is no reason why any state will not benefit from the proceeds of VAT collected in their domains, especially going by the relevant section of the proposed bill as well as the Section 163(b) of the 1999 Constitution, which talks about derivation in the distribution of revenue from the Federation Account.”

Afenifere’s spokesman expressed hope that the VAT bills would be part of the instruments to be used to fulfill President Tinubu’s vow on his administration’s commitment to easing the pains of Nigerians, and putting the country’s economy on a firm footing.

HOWEVER, Governor Sule, while launching innovative tax digital codes, initiated by the Nasarawa State Board of Internal Revenue Services (NSBIRS) at the Government House, yesterday, re-echoed the position of his Northern colleagues.

He said: “Let me make it categorically clear, we are not against the tax reforms. There are so many good things about the tax reforms that Mr President is putting forward. We just selected an item out of the tax reforms. It is the VAT that we are talking about, which would be taken out of the FAAC.

“That is why we are calling for a review of that position. The moment you take VAT out of FAAC, you are taking 60 per cent of that to go to derivation. Other people are introducing consumption.”