Divisions Emerge over Northern Opposition to Tax Reform Bills
The recent rejection by Northern governors of the proposed Tax Reform Bills, which would base Value Added Tax (VAT) allocation on derivation, has ignited debate among key groups across Nigeria. The Pan-Niger Delta Forum (PANDEF), Middle Belt Forum (MBF), and prominent Southern leaders have expressed disapproval over the North’s opposition, describing the rejection as a potential obstacle to fiscal fairness.
The bills — the Nigeria Tax Bill 2024, Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and Joint Revenue Board Establishment Bill — seek to localize VAT revenue, emphasizing consumption patterns and encouraging states to boost internal revenue. However, at a recent meeting in Kaduna, the Northern Governors Forum, led by Governor Muhammad Inuwa Yahaya of Gombe State, condemned the proposal, asserting it would disadvantage the North due to the lower concentration of corporate headquarters in the region.
Southern and Middle Belt Reactions The MBF, through Dr. Isuwa Dogo, endorsed the reforms, arguing that VAT should reflect consumption locations, especially for items like alcohol, banned in parts of the North. Dr. Kunle Olajide, a Yoruba Elders Council member, described the North’s stance as divisive, emphasizing that fair VAT distribution aligns with President Tinubu’s vision for balanced national development.
PANDEF spokesperson Chief Dr. Obiuwevbi Christopher Ominimini called for resource-based VAT distribution, lamenting the environmental damage in the Niger Delta despite its contributions to national revenue. He criticized the North’s resistance, arguing that it symbolizes a disregard for regional equity and sustainability.
Arewa Civil Rights Movement’s Stance Dr. Agabi Emmanuel, president of the Arewa Civil Rights Movement (ACRM), urged Northern lawmakers to consider their constituents’ interests rather than following the governors’ directives. Emmanuel argued that the North’s image could be tarnished by appearing overly reliant on federal allocations rather than fostering investment and growth. ACRM contended that the reforms could prompt the North to create a business-friendly environment, stimulating regional economic activities.
Economic Perspectives Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, cautioned that the reforms might be politically motivated and urged careful handling. Conversely, finance expert Biyi Adesuyi criticized Northern leaders’ opposition, suggesting they reconsider approaches to local revenue generation. Adesuyi pointed to the pre-military regional tax autonomy that once allowed areas like the Western Region under Obafemi Awolowo to thrive.
Northern Political Voices Senator Ali Ndume joined Northern leaders in opposing the reform, citing concerns over a struggling middle class due to inflation and economic strains. He criticized the Federal Government’s tax agenda, labeling it anti-people and urging a focus on economic stability before implementing such reforms.
This latest debate reflects deeper national tensions on fiscal federalism and the need for equitable revenue-sharing that aligns with the contributions of each region. While the Northern governors maintain that the reforms would unfairly disadvantage the North, voices from the South, Middle Belt, and some Northern civil groups argue for a reimagined tax system that recognizes regional contributions and fosters self-sufficiency across states