The Presidency has come out swinging against claims that proposed tax reform bills will financially disadvantage Nigeria’s northern states while enriching power states like Lagos and Rivers. According to a statement by Bayo Onanuga, Special Adviser to the President on Information and Strategy, such fears are “recklessly canvassed” and unfounded.
Onanuga, in his Monday statement titled ‘No Part of Tax Reform Bills Recommends Scrapping TETFUND, NASENI, and NITDA. No Provision Will Impoverish the North,’ sought to reassure critics that the reforms won’t centralize tax revenues to the detriment of certain regions. He also clarified that adjusting funding sources for agencies like the Tertiary Education Trust Fund (TETFUND) and the National Agency for Science and Technology Infrastructure (NASENI) does not equate to scrapping them.
The tax reform bills is a big wonder. They include the Nigeria Tax Bill 2024, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill. These proposals aim to streamline tax laws, enhance administrative frameworks, and establish bodies like the Tax Appeal Tribunal and the Office of the Tax Ombudsman.
The reforms have sparked outrage, with Nigerians arguing that the new system could upend Nigeria’s fiscal federalism. The most contentious issue? A derivation-based Value-Added Tax (VAT) distribution model that many northern leaders say will weaken their financial autonomy.
On October 28, the Northern Governors’ Forum, representing 19 states, unanimously rejected the proposed VAT model, calling it a potential economic disaster for their region. Just days later, the National Economic Council, which includes all 36 governors, urged President Bola Tinubu to withdraw the bills from the National Assembly for broader consultation.
However, the President is standing firm. He dismissed the calls to pull the legislation, insisting that the bills can evolve through legislative processes without being withdrawn. Tinubu believes in “consultations on the go,” a strategy some people might call kicking the ball down the road.
Will these reforms genuinely create a fairer, more efficient tax system, or are they a veiled attempt to shift resources and power toward Nigeria’s wealthiest regions?
