Africa (Commonwealth Union) _ In response to concerns regarding Nigeria‘s proposed tax reform bills, President Bola Ahmed Tinubu, through his Special Adviser Bayo Onanuga, has assured Nigerians that these reforms are not intended to disadvantage any region, particularly the North. The reforms aim to enhance tax administration and streamline revenue collection, ensuring a fairer system that does not increase the tax burden or result in job losses.
The statement comes after opposition from the Northern Governors’ Forum, led by Governor Muhammed Inuwa Yahaya of Gombe State, who voiced concerns over the proposed derivation-based model for Value-Added Tax (VAT) distribution. Governors and traditional rulers, including the Sultan of Sokoto, raised concerns that the new VAT model could unfavorably impact Northern states.
The Presidency clarified that the four bills— the Nigeria Tax Bill, the Nigeria Tax Administration Bill (NTAB), the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board Establishment Bill—are designed to eliminate redundant taxes, improve coordination, and establish an efficient tax system. The Nigeria Tax Bill, for example, focuses on reducing double taxation, while NTAB aims to standardize tax processes across federal, state, and local levels, making compliance simpler for taxpayers.
A significant change under consideration is renaming the Federal Inland Revenue Service to the Nigeria Revenue Service (NRS), reflecting its role as a national revenue agency. Additionally, the Joint Revenue Board Establishment Bill proposes forming a unified tax oversight body, along with a Tax Ombudsman to mediate taxpayer complaints, promoting greater transparency.
The Northern Governors’ concerns centered on the new VAT derivation model, which suggests distributing VAT based on consumption locations rather than collection points. This aims to address inequalities in the existing VAT model and ensure that states producing goods for national consumption, particularly in the agricultural sector, receive their fair share of tax revenue.
In response, Onanuga highlighted the administration’s commitment to equitable growth across all regions. “The reforms are critical to improving the lives of Nigerians and were not put forward by President Tinubu to undermine any part of the country,” he stated. By consolidating taxes such as Company Income Tax, Personal Income Tax, and VAT under a unified framework, the government hopes to address inefficiencies and foster growth.
The National Assembly is currently considering the reform bills as a means to generate the necessary resources for Nigeria’s development. The administration believes that clearer tax laws, aligned responsibilities across government levels, and improved resource management will lead to a more resilient economy and improved quality of life for Nigerians.
