Northern Groups Reject Tax Reform Bills, Demand Wider Consultations

Northern groups, including the Coalition of Northern Groups (CNG) and the Northern Elders Forum (NEF), have reiterated their opposition to the proposed tax reform bills currently under consideration by the National Assembly.

The groups called for the withdrawal of the bills, demanding broader consultations and extensive dialogue with stakeholders.

During a one-day town hall meeting at Gombe State University, themed ‘Tax Reform Bill: A Catalyst for Economic Growth or a Burden on the People?’ the CNG Gombe Coordinator, Mustapha Deba, expressed concerns over the potential impact of the reforms.

The meeting, attended by representatives of various northern interest groups, academics, and civil society organizations, emphasized the need for the government to engage meaningfully with stakeholders before implementing tax policies that could disproportionately burden certain regions.

Deba said, “The proposed reform’s emphasis on derivation appears to favour states with higher VAT-generating activities predominantly in the South, such as Lagos. This shift could significantly reduce the revenue shares allocated to Northern states, where economic activities are comparatively lower.

“The resultant financial shortfall would impede our region’s development initiatives and exacerbate existing disparities. By altering the VAT sharing formula without adequate safeguards, the reform risks widening the economic gap between the North and South.

“Such an outcome could foster social unrest, trigger migration to economically stronger states, and precipitate other socio-economic challenges. We must avoid any policy that could deepen regional inequalities.”

A major point of contention, he said, is the absence of comprehensive data and analysis to support the proposed changes.

He further stated, “As we reflect on the implications of the tax reform bills, it is imperative that we advocate for a tax system that fosters national unity and economic prosperity. We cannot afford to endorse reforms that deepen existing divides or marginalize any segment of our society.”

Prof Sadiq Abubakar while speaking at the event observed that the tax reform bills had ignited considerable debate, often revealing the polarising sentiments experienced by various stakeholders across the nation, especially regarding their implications for Northern Nigeria.

He stated, “The proposed reforms are expected to streamline tax administration processes and frameworks, increase overall government revenue, and stimulate sustainable economic growth, to mention a few. Nevertheless, these reforms would come with socio-economic repercussions, particularly for Northern Nigeria, which struggles with distinctive challenges ranging from insecurity, poverty, unemployment, and food insecurity.

“Proposed changes to Value Added Tax rates, distribution of VAT revenues, development levies, and taxation on various sectors including agriculture and religious organisations, could exacerbate existing economic hardships and cultural tensions.

“Some sections of the bills clash with religious values, risking the marginalisation of some faithful. To avoid exacerbating socio-economic disparities and to establish a fair and more inclusive taxation framework, policymakers must consider the unique cultural and economic landscapes of all regions, especially Northern Nigeria.

“Engaging in comprehensive dialogue with varied stakeholders will foster legislative outcomes that respect the rights and welfare of all citizens, ensuring a balanced approach to taxation that promotes national unity and economic stability.”

The chairman on the occasion, Umar Gurama, in his take on the tax reform bill urged the participants to collaborate with lawmakers in sensitising communities and gathering their inputs before such reforms become law.

Weighing in again on the controversy, the NEF criticised the Federal Government’s alleged failure to engage with critical stakeholders and experts before drafting the bills.

The forum made known its position in a statement signed by its Chairman, Management Board, Al-Amin Daggash.

Daggash said, “Once again, it is necessary to reiterate, that indeed, Nigerians in general and Northerners in particular, are not really against the introduction of any form of good and meaningful reforms by those in positions of authority, at the federal, state or local government levels.

“Even though we shall remain very implacable in reaffirming that our practical experiences teach us that going by global best practices, successful reforms are known to be underpinned by strict adherence to certain common cardinal characteristics of the public policy-making process.

“For the convenience of exposition, these similarities include, but not limited to the under-listed essentials: Extensive pre-reforms early engagements with experts and critical stakeholders, in order to secure their buy-in; establishing a very well-defined media/communication strategy that clearly articulates the full import of the reforms and disseminates public awareness and mass enlightenment on a nationwide scale; designing a robust, transparent and inclusive implementation mechanism.

“The Northern Elders’ Forum makes bold to say that the recently proposed Tax Reform Bills by the Federal Government were clearly in breach, with regards to adhering to the above-listed common characteristics of reforms and public policy-making process, all over the world and in conformity with the global best practices.”