Tax bills: Tinubu hails govs as Ndume rejects 30% VAT formula

President Bola Tinubu, on Friday, expressed his appreciation for the Nigeria Governors’ Forum, following their unanimous endorsement of the revised tax reform bills currently under consideration by the National Assembly.

Tinubu lauded the governors for “their bold leadership and commitment to fostering unity among leaders nationwide.”

The President, in a statement by his Special Adviser, Bayo Onanuga, said the consensus transcended regional, ethnic, and political barriers to advance Nigeria’s development.

On Thursday, January 17, the governors collectively endorsed President Tinubu’s proposed tax reform bills, including the contentious shift to a derivation-based VAT model.

 The President described Thursday’s consultation between the NGF and the Presidential Committee on Tax and Fiscal Policy as “a commendable example of cooperation between the Federal and State governments.”

 He extended special commendations to the Chairman of the NGF, and Kwara State Governor, Abdulrahman AbdulRazaq, for successfully galvanising support among his peers for the bill.

Tinubu also commended the Progressive Governors Forum, the Northern Governors Forum, and all other groups that made the bipartisan resolution of the controversy stirred by the tax bills possible.

The President noted that the primary aim of the bills was to promote national interests, improve the competitiveness of Nigeria’s economy, and attract both local and foreign investments.

“The President notes that the dialogue between the NGF and the Presidential Committee on Tax and Fiscal Policy Reform highlights the power of constructive conversation in resolving differences.

“President Tinubu regards the governors as vital contributors to nation-building and affirms his commitment to partnering with them to promote economic growth, national harmony, peace, and stability,” the statement read.

Ndume rejects 30% new VAT sharing formula

Meanwhile, the lawmaker representing Borno South Senatorial District, Ali Ndume, has kicked against the 30% derivation sharing formula of Value Added Tax in the updated tax reform proposal endorsed by the 36 state governors on Thursday.

In an exclusive interview with Saturday PUNCH, Ndume said the proposed 30% VAT sharing formula remained high, despite the endorsement by the governors.

He said, “30% VAT sharing based on derivation is too high. Do not forget that derivation for oil-producing states is 13 per cent and these are people who are bearing the brunt of environmental degradation. I personally think that derivation should either be 10 per cent or if we must go higher, 13 per cent.”

On the shift of position by the governors, Ndume said, “It is good that the governors accepted the adjusted VAT sharing formula, but it should not stop there. The National Economic Council, the Northern Elders Forum, and all those who opposed the bills should come up with their position on this new development so that together, a common ground can be reached on the way forward.

“Now that the governors have spoken, the public should also be allowed to bare their minds on the tax bills through public hearings,”

The senator called for a reduction of the four per cent non-oil revenue retained by the Federal Inland Revenue Service, saying, “What they are collecting is an administrative tax. It should not be more than 1 per cent,

“This is why they spend extravagantly because four per cent of the trillions of naira they collect every year is huge.”

Going forward, the All Progressives Congress chieftain urged the Federal Government to learn from the controversy the tax bills generated owing to a procedural misstep.

“Any proposal or reform targeted at the public should be given time for the people to make their input. There is no need to rush public policy because laws are made for the people and not the people for the laws,” he added.