Botu endorses tax reform bills 

Respected Niger Delta leader and former National Head of Surveillance, Independent Petroleum Marketers Association of Nigeria (IPMAN), Prince Emmanuel Botu, also known as Olotu, has thrown his weight behind the tax reform bills currently before the National Assembly.

Botu believes the proposed tax reforms are a forward-thinking move to modernize Nigeria’s fiscal framework, which would ultimately transform the country’s economy.

He emphasized that revising the VAT sharing formula would allow Nigeria to adopt a more federal system, enabling states to collect taxes on goods consumed within their territories, while the Federal Government focuses on collecting and enforcing VAT on imports.

He argued that this approach would foster trade, commerce, and sustainable development at the state level.

“States like Lagos, Rivers, and Delta, which have been historically disadvantaged in the VAT sharing arrangement, are likely to benefit significantly from the proposed formula. This could lead to improved infrastructure and social services in these states.

“The reliance on equality (50%) and population size (30%) has resulted in certain states receiving allocations far in excess of their economic contributions, while resource-rich states struggle to see a return commensurate with their input.

“The proposed review and revision of Nigeria’s VAT sharing formula is an essential step towards achieving a more equitable fiscal policy that reflects both the contributions and the developmental needs of Nigeria’s diverse states. While the shift to a more derivation-focused formula will benefit resource-rich states, it will require careful monitoring and adjustments to ensure that no state is left behind. Ultimately, the goal is to ensure that the VAT system promotes national unity, fairness, and sustainable development across all regions,” he said.

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The proposed legislation before the National Assembly, which has sparked debate, includes the Nigeria Tax Administration Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Joint Revenue Board of Nigeria (Establishment) Bill, 2024 and Nigeria Tax Bill, 2024.

The Guardian reports that controversy surrounds the tax reform bills as several Northern states oppose their passage in the National Assembly, specifically objecting to the new derivation-based model for Value-Added Tax (VAT) distribution.

The Northern Governors’ Forum expressed concerns that this model would unfairly benefit resource-rich states at the expense of others.

However, proponents argue that the reforms aim to streamline Nigeria’s tax administration, eliminate multiple taxation, and promote economic competitiveness.