- The 36 state governors of Nigeria unanimously demand the withdrawal of the National Tax Reforms Bill, citing the need for further consultations
- The proposed reforms aim to overhaul Nigeria's taxation system but face significant opposition, particularly from northern governors concerned about a new VAT distribution model
- The Presidency defends the reforms, asserting they will promote economic growth without increasing the tax burden on citizens
The 36 state governors of Nigeria have unanimously called for the immediate withdrawal of the National Tax Reforms Bill, a move that challenges the comprehensive efforts of the Presidential Fiscal Policy and Tax Reforms Committee led by Taiwo Oyedele.
The governors made their demands during a meeting of the National Economic Council, Nigeria’s highest economic advisory body, on Thursday, October 31.
Oyo State Governor Seyi Makinde announced the decision, stating that the council agreed it was crucial to conduct further consultations before proceeding with the bill.
He emphasised the need for consensus-building to ensure that all stakeholders fully understand the proposed reforms.
“The council recommends the withdrawal of the bill currently before the National Assembly to allow for wider consultations and to clarify any misinformation,” Makinde stated.
The proposed tax reforms aim to overhaul Nigeria's taxation system, with a focus on fair taxation, responsible borrowing, and sustainable spending.
Despite a presentation by Oyedele detailing the intended benefits of the reforms, which include streamlining tax processes and establishing a unified revenue service, the governors remained unconvinced.
The reforms, stemming from a review of existing tax laws, encompass four executive bills, including the Nigeria Tax Bill and the Nigeria Revenue Service (Establishment) Bill.
These bills seek to simplify tax obligations, harmonize administrative processes, and create a more efficient tax framework across federal and state jurisdictions.
However, the Northern Governors’ Forum, representing 19 governors from the northern region, has expressed opposition to the reforms, particularly regarding the proposed derivation-based model for Value-Added Tax (VAT) distribution.
They argue that the new model undermines the interests of northern states, potentially leading to job losses and economic instability.
In response to the governors' concerns, the Presidency defended the tax reforms, asserting that they would not result in job losses and would instead foster economic growth.
Special Adviser to the President on Information and Strategy, Bayo Onanuga, emphasised that the proposed changes are designed to optimize existing tax frameworks without increasing the overall tax burden on citizens.
As the National Assembly considers the governors' request, both the Senate and the House of Representatives unexpectedly adjourned plenary until November 19, complicating the timeline for the proposed reforms.
VAT rate hasn’t been increased, remains 7.5%, Finance Minister Edun clarifies
Meanwhile, TheRadar earlier reported that the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, declared that the rate for Value-Added Tax (VAT) has not been increased but remains 7.5 per cent as contained in the relevant tax laws and chargeable on goods and services.
Edun’s clarification came on the heels of recent media reports of an imminent increase in VAT following the statement by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, in June that the plans to increase the VAT rate to 10 per cent will be implemented in phases.
