Stakeholders urge caution, review of tax bill for consensus

• Southern govs mum, avoid rift with North over rejection of bill
• Tax reform will benefit North, says Atoyebi

Following the Northern Governors Forum (NGF)’s rejection of the proposed Tax Reform Bill, claiming that the contents, if signed into law, would jeopardise the North’s interests, the Chairman, Southern Governors Forum, Governor Dapo Abiodun, and the Chairman, South WestGovernors Forum, Babajide Sanwo-Olu, have remained silent.

Their decision to be mute may be to avoid turning the scenario into a North versus South controversy.

However, the Technical Assistant (Broadcast Media) to the Executive Chairman of the Federal Inland Revenue Service (FIRS), AderonkeAtoyebi, said a cursory look at the reform would reveal opportunities for the Northern states and the entire country.

A Lagos State government source told The Guardian that Sanwo-Olu was watching the development, bearing in mind that one of his predecessors, Babatunde Fashola, had pursued the issue of tax reform to the Supreme Court, just as the Minister of Federal Capital Territory (FCT), Nyesom Wike, did when he was governor of Rivers State.

Dapo Abiodun’s Special Adviser on Media, Kayode Akinmade, told The Guardian that his boss would respond appropriately after discussing with his colleague governor in the forum.

Meanwhile, the Development Agenda for Western Nigeria (DAWN) Commission, called on the National Assembly to approach critical reform through constructive dialogue among all stakeholders.

Director-General of DAWN, SeyeOyeleye, said if properly implemented, the reform would strengthen Nigeria’s fiscal framework while ensuring no region is left behind.

While disregarding the position of the Northern governors on the matter, Oyeleye said, “It is crucial to note that the proposed reforms have strategically excluded several items from the Value-Added Tax (VAT) list, which will likely result in reduced VAT generation across all states, including top contributors like Lagos and FCT.”

The Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said:

“We share the sentiment expressed by the Northern governors regarding the inequity inherent in the current model of derivation as a basis for distributing VAT revenue. This issue affects many states across all geopolitical zones because the derivation is mainly determined based on where VAT is remitted, rather than where goods or services are supplied or consumed.”

In a letter to the governors of Northern Nigeria states, Atoyebi noted that the reform was about tax prosperity.
She quoted the Executive Chairman, Federal Inland Revenue Service (FIRS), Dr Zacch Adedeji, as saying that the reform was not to create new taxes or burden the everyday citizen.

“In clearer terms, the reform is designed to ensure that those with greater means and profits contribute fairly while also reducing redundant taxes that impact small businesses and local communities. This streamlined approach offers simplicity, making tax compliance easier and more efficient for businesses, farmers and traders alike, thereby allowing our local enterprises to grow without unnecessary hindrances.

“What does this mean for Northern Nigeria? In practical terms, a derivation-based VAT model would redirect funds from goods and services generated locally back into the communities that produce them. It also means resources collected in the North would be reinvested directly into Northern infrastructure. Such reinvestment has the power to create a real impact: stimulating local businesses, attracting new industries, and generating more wealth within the region over time,” she stated.

Atoyebi encouraged the dissenting governors to consider the reforms not only for the present but for the potential they unlock for a prosperous Northern Nigeria.