Northern governors ask lawmakers to reject Tinubu’s tax reform bills, give reason

A fresh hurdle has emerged for the tax reform bills before the National Assembly, as the influential Northern Governors’ Forum has openly rejected some of the proposals, particularly the VAT sharing template in one of the bills.

The northern governors reached this resolution on Monday after a meeting in Kaduna, North-west Nigeria.

The governors in attendance were Uba Sani of Kaduna State, Inuwa Yahaya of Gombe, Dauda Lawal Dare of Zamfara, Abdullahi Sule of Nasarawa, Babagana Zulum of Borno, Bala Mohammed of Bauchi, AbdulRahman AbdulRazaq of Kwara, and Ahmadu Umaru Fintiri of Adamawa. Other governors were represented by their deputy governors.

Governor Yahaya of Gombe State, while reading the communiqué from the meeting, said the tax bills are against the interests of the North and instructed northern lawmakers to reject the bills.

Earlier in October, President Tinubu sent four fiscal bills to the National Assembly for consideration. These include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill.

One of the bills proposes changing the sharing formula of the Value Added Tax, reducing the federal government’s share from 15 percent to 10 percent. However, the bill includes a caveat that the allocation among states will consider the derivation principle.

“This is because companies remit VAT based on the location of their headquarters and tax office, rather than where the services and goods are consumed. In view of the foregoing, the forum unanimously rejects the proposed Tax Amendments and calls on members of the National Assembly to oppose any bill that could jeopardise the well-being of our people,” said Mr. Yahaya, who also serves as the chairperson of the forum.

He added that while the governors are not against reforms, the forum demands equity and fairness.

“For the avoidance of doubt, the Northern Governors’ Forum is not opposed to policies or programs aimed at fostering national growth and development. However, the forum calls for equity and fairness in implementing all national policies and programs to ensure that no geopolitical zone is short-changed or marginalised,” he said.

The 19 northern states and the FCT have the majority in the National Assembly. This means that the region can have its way on any bill if it secures the bloc vote of its lawmakers in both chambers of the National Assembly. Their bloc vote will definitely surpass the threshold of the simple majority they need to shoot down or successfully back a bill in both chambers.

VAT has been a contentious issue for years between the federal government and the states. Some states have previously challenged the legality of the federal government collecting VAT.

In 2021, the Federal High Court in Port Harcourt, Rivers State, issued an order restraining the Federal Inland Revenue Service (FIRS) from collecting value-added tax (VAT) and personal income tax (PIT) in Rivers State.

Subsequently, Nyesom Wike, the then governor of Rivers State, signed into law a bill which authorises the Rivers State Government to henceforth collect Value Added Tax (VAT) in the state.

This sparked a legal tussle between the state and the federal government, with Lagos State also expressing interest in joining the suit over VAT.

‘Our youths want change’

The governors also noted that current economic hardships are fuelling unrest among young people, and they called for urgent intervention to address the root causes.

“Our young people are calling out for change, and it is our responsibility to listen and act. We must scale up efforts to tackle the root causes of youth restiveness by investing in education, skills development, and job creation. Let us focus on creating pathways for the youth to channel their energy into productive ventures, thereby reducing their vulnerability to crime and social vices.

“The economic hardship faced by many Nigerians today is undeniable and given the North-South disparity in economic inequality, it is even more pronounced in northern Nigeria. This calls for urgent intervention,” he added.

The governors also highlighted ongoing power disruptions in the region.

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“As we speak today, most of our northern states are in darkness due to the vandalization of electricity transmission infrastructure. This underscores not only the vulnerability of critical infrastructure but also the need to build additional transmission lines and diversify our energy supply to better connect our region and improve our energy resilience,” the communiqué reads in part.

The meeting was attended by notable traditional rulers in the region, including the Sultan of Sokoto, Sa’ad Abubakar III; Shehu of Borno, Abubakar Amin El-Kanemi; Emir of Zazzau, Ahmad Bamalli; Ohinoyi of Ebira land, Ahmed Anaje; Etsu Nupe, Yahaya Abubakar; Emir of Kazaure, Najib Adamu; Emir of Bauchi, Rilwanu Sulaiman Adamu, and others.