Northern Groups Demand VAT Reduction to 3%

• The Coalition of Northern Groups opposes proposed tax reforms, demanding a reduction of VAT to 3% instead of an increase to 15%
• Participants at a Kaduna town hall meeting expressed concerns over the socioeconomic impact of tax reforms, urging immediate government action

The Kaduna State chapter of the Coalition of Northern Groups (CNG), in collaboration with civil society organizations (CSOs) and other key stakeholders, has voiced strong opposition to the federal government’s proposed tax reform bills.

During a town hall meeting in Kaduna, participants called for reducing Value Added Tax (VAT) from the current rate to 3%, rather than the proposed increase to 15%.

The gathering included policymakers, academics, youth groups, and citizens, all of whom expressed concern over the socioeconomic impact of the proposed reforms.

A communiqué issued at the meeting, signed by Comrade Muhammed Sanusi Ali on behalf of 134 Kaduna-based CSOs and NGOs, highlighted concerns about potential amendments to the VAT distribution formula and the defunding of agencies like NITDA, TETFUND, and NASENI.

Key points raised in the communiqué include:

• The lack of clear definitions for terms such as “derivation” and “family wealth” in the proposed bills.
• Criticism of the current system that allocates VAT revenue based on a company’s headquarters location rather than where services are consumed.
• Concerns that the reforms could exacerbate economic hardships, deepen poverty, increase unemployment, and hinder local business growth.

The communiqué urged the federal government to halt VAT increases and lower the rate to 3% to relieve financial pressure on businesses and citizens, stimulating economic activity.

Additionally, the meeting recommended:

• The relocation of banks and telecommunications companies’ headquarters to Abuja for equitable distribution of revenue benefits.
• Exclusive engagement by Northern governors and organizations with banks that comply with this recommendation.
• The reopening of land borders, citing the devastating economic impact of their continued closure on border communities.

The CNG emphasized that such changes are critical to ensuring fairness and fostering economic recovery in the region.