The Nigerian Presidency has once again called on state governors to support the controversial Tax Reform Bills that have sparked heated debates across the country.
On Wednesday, the Senior Special Assistant to President Bola Tinubu on Media and Publicity, Temitope Ajayi, urged state leaders to “put on their thinking caps” and consider how the proposed reforms could help their states grow economically.
The call comes after Borno State Governor, Prof. Babagana Zulum, led a group of northern governors who have vocally opposed the bills. Zulum has argued that the reforms would disproportionately benefit southern states, particularly Lagos and Rivers, leaving northern states at a disadvantage.
Governor Zulum voiced his concerns in an interview on Channels TV, where he expressed that the bills would deepen regional inequalities. He stated that the northern states, which are already facing economic challenges, would not benefit as much as their southern counterparts from the tax reforms.
In response to the criticism, Temitope Ajayi released a statement on Wednesday, urging Nigerians not to be swayed by fears of the unknown. He acknowledged that while change can be uncomfortable, the proposed reforms have the potential to strengthen both the federal government and the states.
“Human beings naturally resist change. When comfortable where we are, we find it extremely difficult to embrace an uncharted path or seek greater glory,” Ajayi said in the statement. “We should not, however, be so imprisoned by the fear of the unknown not to explore new possibilities because we find our present circumstances satisfying enough.”
The presidency’s strong defense of the bills points to their potential to diversify revenue sources for states and reduce Nigeria’s dependence on federal allocations.
Ajayi noted that the Tax Reform Bills include provisions that would directly benefit states, especially those struggling with low revenue generation. According to Ajayi, the bills would allow states to keep a greater share of Value Added Tax (VAT) and ensure that more income from electronic money transfer levies is directed to the states.
He also highlighted that the reforms would repeal outdated laws and introduce a more streamlined tax system. “These reforms are not injurious to the states. They provide incentives for states to become economic powerhouses,” Ajayi said.
The government also pointed out that the bills would allow states to benefit from taxes on limited liability partnerships and introduce a fairer system for VAT distribution. States would also receive greater tax intelligence and support in enforcing tax compliance through the integration of tax administration systems.
Ajayi’s statement emphasized that the tax bills are designed to enhance the financial autonomy of the states by creating a legal framework for taxing lottery and gaming activities, as well as providing tax exemptions on bonds issued by state governments.
“States will enjoy a more equitable model for VAT attribution and distribution that will lead to higher VAT income,” Ajayi explained. “The proposed laws will also enhance joint revenue boards and strengthen the fiscal capacity of states to support businesses and socio-economic activities.”
The presidency’s response to Governor Zulum’s opposition underscores the growing divide between northern and southern governors on the issue. While southern governors generally support the reforms, arguing that they will lead to more equitable development, northern governors like Zulum have expressed concerns about the potential impact on their states.
For instance, Zulum’s argument that the reforms will favor Lagos and Rivers, Nigeria’s two wealthiest states, has resonated with some northern leaders who fear that the north will be left behind.
However, the presidency insists that the bills are designed to strengthen Nigeria’s entire fiscal system. It argued that the reforms would make the country’s tax system more efficient and generate additional revenue that could be used to support states across the nation.
The presidency further explained that while Governor Zulum’s objections have been vocal, they are based on misinterpretations of the bill’s contents. It called on the Borno State governor and other critics to carefully review the legislation before forming their conclusions.
Ajayi suggested that the resistance from some governors stems from a lack of understanding of the long-term benefits of the reforms. He called on them to embrace the opportunities that the tax bills present, rather than clinging to outdated systems that hinder growth.
“The challenge for governors will be to put on their thinking cap,” Ajayi stated. “This means investing in manpower, infrastructure, and policies that will enable businesses and economies to thrive within their states.”
Despite the challenges ahead, Ajayi remains optimistic about the future of the Tax Reform Bills. He urged Nigerians to recognize that the bills are part of the government’s broader strategy to boost economic growth and reduce reliance on oil revenues.
“The reforms will make both the federal and sub-national governments fiscally stronger and more capable of driving economic development,” Ajayi concluded.
