- On October 13, Tinubu asked the national assembly to consider and pass four tax reform bills.
- The proposed legislations are the Nigeria tax bill, tax administration bill, and joint revenue board establishment bill.
Abdullahi Sule, Nasarawa governor, has clarified that northern governors only object to removing value-added tax (VAT) from the federation account allocation committee (FAAC).
Sule made this statement on Thursday during the launch of innovative tax digital codes by the Nasarawa state board of internal revenue services (NSBIRS) at the government house.
The governor commended President Bola Tinubu’s administration and emphasised the need to scrutinize a key aspect of the tax reforms to prevent economic hardship in the north.
“Let me make it categorically clear, we are not against the tax reforms. There are so many good things about the tax reforms that Mr. President is putting forward,” Daily Trust quoted Sule as saying.
“We just selected an item out of the tax reforms. It is the VAT that we are talking about, which would be taken out of the FAAC. That is why we are calling for a review of that position.”
“The moment you take VAT out of FAAC, 60 percent goes to derivation. Others introduce consumption, which is complex, especially for those who have managed large companies.”
“I was once a managing director, paying VAT and taxes. I know how it was paid and where goods are consumed. If you say it’s now at the point of consumption, I can educate someone about consumption.”
“A typical example is from my experience as CEO of African Petroleum. A customer from Maiduguri ordered 200 trucks, but only 10 were delivered there. The rest were distributed from Ilorin to Sokoto.”
“This makes understanding consumption difficult. If it’s at the point of derivation, corporate headquarters in Lagos collected for the 200 trucks, meaning I pay in Lagos. Either way, you’re in default.”
On October 13, President Tinubu asked the national assembly to consider four tax reform bills: the Nigeria tax bill, tax administration bill, and joint revenue board establishment bill.
The Northern States Governors Forum (NSGF) rejected the proposed tax amendment bill, specifically the shift to a derivation-based model for VAT distribution.
On October 29, Sule deemed the proposed VAT sharing formula based on the derivation model “unfair” to the north.
Also at the event, the governor praised Ahmed Mohammed, NSBIRS chair, for pioneering a digital tax solution to boost state revenue.
Sule noted that the informal sector poses a significant challenge for revenue generation, emphasizing that economies grow through productivity and manufacturing.