- The National Assembly will reconvene today to expedite the passage of tax reform bills, following a controversial proposal by President Tinubu
- A compromise was reached among governors, reducing VAT allocation from 60% to 30%, ensuring a more balanced distribution of funds
The National Assembly will reconvene today, focusing on accelerating the passage of the tax reform bills.
After its first sitting of 2025 on January 14, both chambers adjourned until January 28 to allow committees to finalize work on the 2025 Appropriation Bill.
However, the resumption was postponed to February 4 to give committees more time to engage with Ministries, Departments, and Agencies (MDAs) on budget defence.
Before the recess, the four tax reform bills submitted by President Bola Tinubu on October 13, 2024, sparked controversy, particularly among northern lawmakers, governors, and traditional leaders. They argued that the proposed changes could worsen poverty in the region.
During the break, the Nigerian Governors’ Forum (NGF) met with the Presidential Committee on Tax Policy and Fiscal Reforms. A compromise was reached, with governors endorsing the bills after adjustments were made.
One major revision reduced the proposed Value Added Tax (VAT) revenue allocation based on derivation from 60% to 30%. The new formula allocates 50% of VAT revenue equally among states and 20% based on population, ensuring a more balanced distribution of funds.
Previously, the 60% derivation-based VAT allocation meant states received funds in proportion to the VAT they generated, which faced strong opposition from northern governors and lawmakers.
Following the compromise, Governor Abdullahi Sule of Nasarawa State confirmed that governors would seek legislative support to pass the bills under the revised terms.
“The communiqué issued by the governors reflects their position, and they hope for mutual understanding from the legislators,” a source close to one of the governors stated.
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