• North jittery over reforms due to ill-preparedness, says Akpoti-Uduaghan
• ASUU urges National Assembly to safeguard TETFund
• Northern CSOs warn on politicisation of tax debate
After months of tension over the controversial tax reform bills, Nigeria’s 36 governors and the presidency have finally reached a consensus, shelving plans to increase Value Added Tax (VAT) rates and introducing a more equitable revenue-sharing formula.
The resolution came during subnational consultations with the Presidential Tax Reform Committee in Abuja, marking a significant step towards resolving one of the nation’s most divisive fiscal debates.
In a communique issued at the end of the meeting yesterday, the Nigeria Governors’ Forum (NGF) announced that both parties had agreed to drop the proposed VAT increase.
The communique, signed by NGF Chairman AbdulRahman AbdulRazaq, Governor of Kwara State, revealed a revised VAT sharing formula aimed at equitable distribution of resources.
The formula proposes that VAT revenue be shared as follows: 50 per cent based on equality, 30 per cent based on derivation, and 20 per cent based on population.
The governors also opposed any increase in VAT rates or reduction in Corporate Income Tax (CIT) at this time, emphasising the need for economic stability. The NGF further advocated for the continued exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and enhance agricultural productivity.
Also, the communique noted that development levies related to TETFUND, NASENI, and NITDA should not have terminal clauses in the proposed bills. It also expressed support for the continuation of legislative processes in the National Assembly for the eventual passage of the Tax Reform Bills.
The primary areas of contention in the four tax reform bills were the VAT sharing template in the Nigeria Tax Administration Bill and a proposed increase in VAT rates.
The earlier bill had suggested reducing the federal government’s share of VAT from 15 per cent to 10 per cent while allocating 55 per cent to state governments and the Federal Capital Territory (FCT) and 35 per cent to local councils.
A controversial clause in the bill would have applied the derivation principle, requiring VAT revenue to be remitted based on the location of companies’ headquarters or tax offices rather than where goods and services are consumed.
The proposal to increase VAT rates had also drawn criticism. It had outlined a progressive hike, from 7.5 per cent to 10 per cent in 2025, 12.5 per cent by 2029, and 15 per cent by 2030, aligning with VAT rates in other African countries.
By resolving these issues, the presidency and governors aim to ensure the tax reforms promote fairness, economic stability, and sustained development across the nation.
Meanwhile, Senator Natasha Akpoti-Uduaghan, chairman of the Senate Committee on Local Contents, has attributed the unease among stakeholders in Northern Nigeria over the tax reform bills before the National Assembly to the region’s lack of preparedness for fiscal changes.
Speaking during the Sardauna Memorial Day in Kaduna, the senator, who represents Kogi Central Senatorial District, called for the revitalisation of the north’s socio-economic and cultural heritage to enhance its economic prospects.
Her remarks were contained in a statement issued yesterday by her media aide, Arogbonlo Israel, in Abuja.
Akpoti-Uduaghan urged the region to draw inspiration from the vision of the late Sardauna of Sokoto, Ahmadu Bello, who led Northern Nigeria to economic prosperity in the 1950s.
She highlighted the region’s past successes, citing that in 1959, Nigeria’s groundnut exports to the United Kingdom were valued at £27 million, equivalent to N3.6 trillion today, compared to the current $3 million.
“The only reason why the North is jittery about the tax reform bills is because we are ill-prepared,” she said. “If we were generating N3.6 trillion from one agricultural product, would we be bothered about the reforms?
“Hence, we must ask our leaders with developmental mindsets to stir up the entrepreneurial ecosystems so our lands and factories can be productive once again. Let’s act from a position of economic abundance for our region and country at large.”
The senator called for collaboration among northern leaders and civil society to revitalise the region’s agricultural and industrial potential, urging them to embrace innovative solutions to foster development.
ALSO, the Academic Staff Union of Universities (ASUU) has called on the National Assembly to protect the Tertiary Education Trust Fund (TETFund) from being dismantled under the proposed Nigeria Tax Bill 2024.
The union urged lawmakers to prioritise accessible and affordable higher education for Nigerian students.
Speaking in Makurdi yesterday, ASUU Nsukka Zonal Coordinator, Raphael Amokaha, described plans to redirect funds from TETFund to an untested loan scheme as “illogical, myopic, and anti-people,” particularly against the interests of the middle and lower classes.
Amokaha warned that Section 59(3) of the Nigeria Tax Bill 2024 proposes significant reductions in the funds allocated to TETFund.
According to him, only 50 per cent of the Development Levy will be allocated to TETFund in 2025 and 2026, with allocations increasing to 66.7 per cent from 2027 to 2029. However, by 2030, all Education Tax proceeds are expected to be redirected to NELFUND, an agency focused on student loans.
“This education tax that the government has proposed to end by 2030 is the source of funds for TETFund. Section 59(3) of the Nigeria Tax Bill (NTB) 2024 specifically states that only 50 per cent of the Development Levy would be made available to TETFund in 2025 and 2026,” Amokaha explained.
“TETFund will also receive 66.7 per cent in 2027, 2028, and 2029, but zero per cent in the 2030 year of assessment and thereafter,” he added.
The union also called on federal and state governments to fulfil their constitutional obligation to adequately fund tertiary institutions, emphasising that interventions like TETFund were not enough to meet the sector’s financial needs.
ASUU further criticised the proposed student loan scheme, warning that it could jeopardise higher education access for many Nigerians and urged the National Assembly to take decisive action to safeguard TETFund.
IN another development, civil society groups, youth associations, and student organisations from across the Northwest expressed concerns over the politicisation of the ongoing debates surrounding the tax reform bills before the National Assembly.
At a symposium held at Arewa House, Kaduna, yesterday, the groups discussed the theme ‘Tax Reform Bills: Between the Facts and Politics’.
The event was organised by the Nigeria First Project Initiative, Muryar Talaka Awareness Initiative, and the Coalition of Northern Nigerian Students Forum, bringing together representatives from seven northwestern states.
In a communiqué issued at the end of the engagement, participants commended the public debate generated by the tax reform bills, describing it as an integral part of democracy. They noted that the reforms, if properly implemented, could significantly enhance revenue generation, reduce dependence on oil, and create a more equitable tax system.
However, they decried the politicisation of the discourse, alleging that certain actors were using the debate to advance personal and political interests, particularly with the 2027 general elections in view.
“The tax reform bills are being weaponised to stir ethnic and regional sentiments, undermining quality contributions that could improve Nigeria’s economy,” the communiqué stated.
The group called on Northern leaders to embrace the reforms as an opportunity to harness the region’s abundant resources for economic self-sufficiency. While acknowledging the challenges of leadership failures at sub-national levels, they urged state governors to diversify revenue sources, prioritise agricultural value chains, and tap into federal policies on solid minerals and livestock development.
Participants also urged Northerners to actively engage in public hearings on the tax bills and to present constructive input through democratic channels.
The communiqué commended President Bola Ahmed Tinubu for his initiatives, including the creation of the Ministry of Livestock Development, the Northwest Development Commission, and the introduction of the student loan scheme, among others.
Also, the groups stressed the need for accountability and visionary leadership in Northern Nigeria, stating that only transparent governance can address the region’s socio-economic challenges.
