The National Economic Council (NEC) has advised the withdrawal of the Tax Reform Bill recently forwarded by President Bola Tinubu to the National Assembly (NASS).
This bill, originating from the Presidential Committee on Fiscal and Tax Reforms’ recommendations, aims to improve Nigeria’s revenue generation through adjustments in the taxation system. However, after discussions led by Vice President Kashim Shettima at the NEC meeting, council members expressed concerns about the bill’s alignment with the needs and perspectives of diverse stakeholders, including state governors.
Governor Seyi Makinde of Oyo State explained that NEC identified a lack of sufficient consultation with key stakeholders, which could hinder the bill’s success and nationwide acceptance. NEC has emphasized the importance of building consensus and ensuring the public understands the vision behind these reforms, addressing issues of “miscommunication and misinformation.”
Northern Governors’ Opposition and Call for Fairness in Taxation
The Northern Governors’ Forum recently expressed strong opposition to elements of the bill, notably the Value-Added Tax (VAT) distribution model. During a meeting in Kaduna, the forum criticized the current VAT framework, which allocates tax revenue based on company headquarters instead of where goods and services are consumed. Governor Inuwa Yahaya, chair of the forum, argued that this system disadvantages northern states and urged Northern lawmakers to reject the tax reform proposals, advocating for equitable policies that do not marginalize any region.
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Governors present included Uba Sani of Kaduna, Babagana Zulum of Borno, and Bala Mohammed of Bauchi, among others, with all in agreement on the need for a fairer approach in tax distribution that supports balanced national development.
Next Steps
NEC’s recommendation for the bill’s withdrawal and the Northern Governors’ call for reform highlight significant challenges ahead for the proposed tax adjustments. The Presidency will likely need to engage in wider consultations to foster greater understanding, collaboration, and inclusiveness across all regions before the bill is reintroduced.
