Northern governors reject Tinubu's tax reform bill, reason emerges

3 weeks ago 1

On Monday, October 28, Northern governors held a strategic meeting in Kaduna state to address security and developmental issues affecting the region
The meeting, led by the chairman of the Forum and Governor of Gombe state, Muhammad Yahaya, also had monarchs and in attendance the Chief of Defence Staff, General Christopher Musa
After key deliberations, they rejected the Nigeria Tax Reform Bill sent to the National Assembly recently by President Bola Ahmed Tinubu and cited their major concern

Legit.ng journalist Esther Odili has over two years of experience covering political parties and movements.

The 19 state governors in the Northern region have aired their strong displeasure on the recent Tax Reform Bill the federal government led by President Bola Ahmed Tinubu submitted to the National Assembly for approval.

The governors particularly rejected the proposed shift to a Derivation-based Model for Value Added Tax (VAT) distribution.

As reported by The Punch on Tuesday, October 29, they claim that the proposed model would be at the disadvantage of the northern states and other less industrial regions.

The governors, under the auspices of the Northern States Governors’ Forum, voiced their strong opposition in a communique issued after a strategic meeting in Kaduna state on Monday, October 28.

The communique was read by the Chairman of the NSGF and Governor of Gombe state, Muhammad Yahaya.

The meeting included northern traditional rulers, the Chief of Defence Staff, General Christopher Musa, and other key stakeholders.

The latest development comes amid multiple debates surrounding resource control and the distribution of Value Added Tax revenue among states. Many northern states where Sharia law is practiced prohibit the sale of alcoholic beverages but still receive a share of VAT collected from alcohol sales.

Northern govs reject new tax reform bill

However, in the new tax reform bill, the Taiwo Oyedele-led panel proposed the amendment of the distribution formula to a Derivation-based Model.

Disapproving this policy, the governors said that VAT is currently remitted based on the location of company headquarters rather than where goods and services are consumed.

They added that the measure will negatively affect the distributed revenue from the Federal Accounts Allocation Committee (FAAC).

The communique read in part:

“The forum notes with dismay the content of the recent Tax Reform Bill that was forwarded to the National Assembly. The contents of the reforms are against the interest of the North and other sub-nationals, especially the proposed amendment to the distribution of Value Added Tax to a Derivation-based Model.“This is because companies remit VAT using the location of their headquarters and tax office 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 can jeopardise the well-being of our people.”

The forum further demanded equity and fairness in national policy implementation and no geopolitical zones should be shortchanged.

The Punch and Daily Trust confirmed the development in their publication on Tuesday.

Economic hardship: Makinde rejects new tax bill

In a related development, Legit.ng reported that Governor Seyi Makinde of Oyo state, on Wednesday, declined assent to the Presumptive Tax Bill passed by the state House of Assembly, in consideration of the current plight of the people.

Makinde declined his assent to the Bill because it would inflict more pain on the poor masses in the state, saying that the people are hungry and angry as a result of the current economic reality in the country.

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Source: Legit.ng

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