Korede Abdullah in Lagos
The Nigerian presidency has reassured the Governors of 19 Northern States that the new tax reform bills, specifically the derivation-based model for Value-Added Tax (VAT) distribution, are not targeted at them.
The Northern Governors’ Forum, comprising 19 states, had expressed opposition to the proposed derivation-based Value-Added Tax (VAT) distribution model in the new tax reform bills before the National Assembly.
The the presidency clarified its stance on Thursday through a press statement signed by Bayo Onanuga, Special Adviser to the President on Information and Strategy.
The presidency said it aimed to streamline tax administration, enhance efficiency, and eliminate redundancies, benefiting all states, including those in the Northern region.
The proposed reforms include four executive bills to transform Nigeria’s tax landscape, focusing on simplifying tax obligations and promoting economic growth.
These bills seek to simplify tax obligations, harmonize tax administrative processes, and consolidate multiple taxes into a unified structure.
The statement said the reforms aimed to promote a more equitable distribution of tax obligations without increasing the burden on Nigerians or leading to job losses.
This development came after the forum’s meeting on October 28, 2024, attended by traditional rulers, including the Sultan of Sokoto, Muhammadu Sa’ad Abubakar III.
The Federal Government clarified that the proposed derivation-based VAT distribution model is intended to create a fairer system.
The current model distributes VAT based on where the tax is remitted, rather than where goods and services are supplied or consumed.
The new proposal considers the place of supply or consumption for relevant goods and services, ensuring that states in the Northern region producing VAT-exempt goods do not lose out.
President Bola Tinubu’s administration emphasizes that these reforms are crucial to improving Nigerians’ lives and urges the National Assembly to consider the bills promptly.
