Governors of Nigeria’s 36 states are calling for a delay in the implementation of the controversial Tax Reform Bills.
The call comes after concerns were raised over some aspects of the bill, particularly the proposed increase in Value Added Tax (VAT).
Nasarawa State Governor, Abdullahi Sule, speaking at a Channels TV Townhall on Monday, explained that while the governors welcomed the reforms, they wanted more clarity.
He said, “The governors appreciate the Tax Reform Bills, but we need answers to certain questions before they are passed into law.”
One of the primary concerns raised was the increase of VAT from 20% to 60% at the point of generation, a provision that has sparked widespread debate.
Governor Sule welcomed recent changes to the bill, which now proposes VAT increase at the point of consumption rather than generation.
“The issue of increasing the VAT from 20% to 60% at the point of generation… I am happy that Taiwo said it has now changed,” he added.
He emphasized that such changes were crucial for better understanding and acceptance of the reforms by the governors.
“The governors said, ‘Why don’t you withdraw the bills, let us discuss it, let us understand it better,’” Sule explained.
Sule also pointed out that a townhall like the one held by Channels TV should have happened before the bills were sent to the National Assembly.
He added, “If these discussions had taken place earlier, there would have been no need to ask for the withdrawal of the bills.”
The governor’s comments were directed at Taiwo Oyedele, head of the Tax Reform Committee, who had been advocating for the bill.
Responding to Governor Sule’s concerns, Oyedele thanked him and the Governors’ Forum for their feedback, saying he took their concerns seriously.
“I appreciate the feedback from the governors,” Oyedele said. “However, holding multiple meetings would have delayed the process even further.”
The tax reform committee chair admitted that although there was initial lack of interest in engaging with the reforms, they were now ready to revisit the discussions.
“We tried to engage the public on these reforms, but the response was not as expected,” Oyedele explained.
“Now that people seem more interested, we are ready to repeat some of the processes and provide further explanations,” he added.
The proposed Tax Reform Bills have been met with strong resistance, particularly from the northern part of Nigeria.
The bill’s controversial VAT increase has sparked concerns that it will disproportionately benefit wealthier states like Lagos and Rivers.
Prof. Babagana Zulum, Governor of Borno State, has been vocal in his criticism of the bills.
He claimed the reforms would disadvantage northern states, leaving Lagos and Rivers as the main beneficiaries.
Speaking on Channels TV, Governor Zulum said, “Based on our research and calculations, only Lagos and Rivers States will benefit from this scheme.”
Zulum and other northern governors argue that the tax reform, particularly the VAT increase, would unfairly favor the southern regions.
“On this tax issue, there are a lot of misconceptions,” Zulum continued. “The northern states would lose out if this bill goes through as it is.”
Zulum also expressed frustration with the speed of the reform, urging the Federal Government to pause and reconsider some of the provisions.
“Why the rush?” Zulum questioned. “We advised the Federal Government to take a pause and reconsider the clauses that are harmful to the northern region.”
Zulum emphasized the need for deeper consultations before the bill is passed into law.
“What we are saying is, give more time for discussion. Let us understand the nitty-gritty of this tax regime before passing it into law,” he said.
Governor Sule echoed Zulum’s concerns, stressing that the reforms should not be rushed.
“We need more time to fully understand how this new tax regime will impact the states,” Sule said.
