In a bold statement that aims to clear misconceptions surrounding the ongoing debates over the controversial tax reform bills, Daniel Bwala, the Special Adviser to President Bola Tinubu on Policy Communication, has stressed that the Northern region is not fundamentally opposed to the reform. Rather, it is a vocal group of governors—chiefly from the north—that are opposing the bills.
Bwala made these remarks during an exclusive interview on Channels Television, countering earlier claims that the Northern region was united against the tax reform initiatives introduced by the federal government.
“The Northern region has no issue with the tax reform bills,” Bwala asserted. “It is the governors who are resisting these changes, and not all of them are from the north. The opposition is largely from governors whose states will experience a reduction in their income if certain provisions in the bill are implemented.”
The tax reform bills, which were submitted by President Tinubu to the National Assembly on October 3, 2024, have sparked heated debates across the country. The bills include significant changes to the structure of Nigeria’s tax system, notably proposing the rebranding of the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS).
Northern Governors: The Real Opponents?
Earlier, the Northern Governors Forum and the Northern Traditional Rulers Council had jointly rejected the tax reform bill during its early stages. Their concerns centered around the potential impact the proposed reforms could have on the financial autonomy of states, particularly in terms of revenue allocation.
However, Bwala was quick to highlight the underlying motivations behind the resistance. “It’s not a regional issue; it’s a matter of state revenue,” he pointed out. “Many governors from various regions are worried about the reduction in their states’ revenue, especially if the derivation principle is applied. These governors, however, are not exclusively from the north.”
The derivation principle refers to the percentage of revenue derived from resources extracted from specific regions, particularly oil. This provision, if implemented, could mean significant shifts in how states with fewer natural resources—especially in the north—receive federal allocations.
Bwala’s remarks are crucial in dispelling the notion that the northern governors’ opposition represents the will of the entire region. “It’s about power and influence,” Bwala continued. “Governors are more concerned with their states’ financial well-being than with the broader regional interests. This issue is no different from the debate on local government autonomy, where it wasn’t about the region but about governors fearing a loss of control over local government funds.”
The Tax Reform Bills: A Path to National Progress
The tax reform bills aim to overhaul Nigeria’s revenue generation system, with the goal of making the tax process more efficient and equitable. As part of these changes, the rebranding of the FIRS to the NRS is expected to make the revenue service more responsive to contemporary economic challenges.
President Tinubu’s push for the tax reform stems from the need to boost the country’s revenue streams, which have been under immense pressure due to fluctuating oil prices and the country’s increasing debt profile. Nigeria’s current tax system, critics argue, is outdated and poorly administered, contributing to a significant revenue gap.
Bwala, who has been a staunch advocate for the reform, explained that the changes are necessary to bring Nigeria’s tax system into alignment with global best practices. “This reform is not just about changing a name or restructuring an agency,” Bwala said. “It is about fostering a more inclusive, efficient, and transparent system that can support national development in the long run.”
A Battle Between Governors and the Federal Government
Despite the broader benefits that the tax reforms could bring to the Nigerian economy, some state governors see the proposed changes as a threat to their fiscal autonomy. The proposed changes to revenue generation, including new collection and distribution methods, are seen by many governors as a direct challenge to their power.
The disagreement has highlighted a deeper issue in Nigeria’s federal system, where state governors wield significant influence over local economies and resources. The idea of redistributing wealth or altering how state revenues are calculated has always been a contentious subject in Nigerian politics.
Bwala acknowledged that the governors are understandably concerned about the implications of the reforms, but he emphasized that the broader national interest must take precedence. “This isn’t just about state power,” Bwala said. “It’s about moving Nigeria toward a stronger, more diversified economy. Yes, some governors will face financial challenges, but they should not prioritize personal interests over national progress.”
The Regional Divide: Fact or Fiction?
At the heart of the debate is the notion that the northern governors are more vocal in their opposition than their southern counterparts. This perception has sparked a regional divide in public discussions, with many Nigerians seeing the disagreement as a north-south issue. However, Bwala was adamant in dispelling this narrative.
“The reality is that this is not a regional issue, it is a governance issue,” Bwala stated. “Governors from different regions are concerned about their states’ revenue loss. It just so happens that many of the most vocal critics are from the north.”
This response from Bwala challenges the narrative of a regionally divided opposition to the tax reforms and refocuses the debate on the real issue—state finances. Bwala’s clarification is critical in steering the national conversation away from regional politics and toward the broader economic implications of the reforms.
Looking Ahead: The Path to Passage
Despite the vocal opposition from some state governors, Bwala is confident that the tax reform bills will eventually pass through the National Assembly. He emphasized that the reform is a necessary step for Nigeria to modernize its tax system and create a more sustainable economy.
“The bills have come to stay,” Bwala asserted. “We must move forward with these reforms, even if it means overcoming the resistance of some governors. In the end, the greater good of Nigeria will prevail.”
As the National Assembly continues to deliberate on the tax reform bills, the stakes remain high. The outcome of this debate will determine how Nigeria structures its future revenue generation and how the balance of power between the federal and state governments is recalibrated.
