The Nigerian government has addressed concerns from the Northern Governors’ Forum regarding proposed tax reforms, asserting that these changes are designed to benefit all regions, including the North.
In a statement titled “Proposed Tax Reform Bills Not Against the North; They Will Benefit All States,” Special Adviser to the President on Information and Strategy, Bayo Onanuga, clarified that the new derivation-based Value-Added Tax (VAT) distribution model aims to create a fairer system for all regions. The reforms, he said, are meant to enhance economic equity across Nigeria.
Governor Muhammad Yahaya of Gombe, the chairman of the Northern Governors’ Forum, had voiced concerns over the proposed reforms at a recent meeting with regional leaders, including traditional rulers. However, Onanuga reiterated that “these reforms are not targeting the North but are intended to ensure fairer economic benefits across all 19 northern states.”
The proposed reforms, comprising four major bills, are currently under review by the National Assembly. These bills — the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill — seek to simplify Nigeria’s tax system and resolve issues of multiple taxation that have discouraged business growth. “Our objective is to streamline tax administration to improve compliance and efficiency,” Onanuga noted.
The reforms aim to ease the burden on Nigerians by exempting essential goods like food, medical services, and educational expenses from VAT. According to Onanuga, “President Tinubu is committed to reducing financial strain on ordinary Nigerians.”
A key change in the VAT distribution model focuses on where goods are consumed rather than where taxes are remitted, a shift expected to benefit states that produce essential goods but may have been overlooked in VAT distributions. “It’s essential that food-producing states don’t miss out on revenue simply because their products are consumed elsewhere,” Onanuga added.
The reforms do not intend to increase taxes but to optimize and simplify tax structures. They also propose renaming the Federal Inland Revenue Service to the Nigeria Revenue Service and establishing a Joint Revenue Board to cover both federal and state tax authorities. This would improve coordination across tax bodies and eliminate inefficiencies that currently burden taxpayers.
The Northern Governors’ Forum, which includes traditional leaders led by the Sultan of Sokoto, His Eminence Muhammadu Sa’ad Abubakar III, expressed reservations about the derivation-based VAT model. The Presidency emphasized that these reforms are aimed at creating a balanced and fair tax system for all Nigerians, ensuring that all regions benefit from a more streamlined and coordinated approach to tax administration.
