Tinubu set to retract the contentious tax reform bill
The administration under President Bola Ahmed Tinubu plans to withdraw the newly introduced Tax Reform Bills from the National Assembly, just two months after their submission. This decision comes after significant opposition from northern governors and traditional rulers, who disagree with the proposed changes to the Value Added Tax (VAT) distribution.
Reports indicate that the presidency has decided to pull back the bills for now, with the intention of revising and resubmitting them later.
On October 31, Vice President Kashim Shettima, chairing the National Economic Council (NEC), officially advised withdrawing the bills. This recommendation reflects a resolution made by governors from Nigeria’s 19 northern states, alongside traditional leaders, who argued that the tax changes could harm the economic interests of the North.
The northern leaders’ primary concern is the proposed VAT model, which they argue would put their region at a disadvantage. Gombe State Governor Inuwa Yahaya, representing the Northern Governors’ Forum, highlighted that the current VAT system unfairly benefits states where businesses are headquartered, instead of the regions where products and services are actually used. They believe this approach undermines regional economic balance.
In a joint statement, the northern leaders expressed support for fair, national tax reforms that benefit all Nigerians, but emphasized that changes must be fair and inclusive to prevent marginalization.
Oyo State Governor Seyi Makinde explained to the media that NEC’s recommendation was made to ensure thorough consultation across regions. Alongside Governors Charles Soludo (Anambra) and Babagana Zulum (Borno), Makinde stated that NEC aims to align all stakeholders on the tax reforms to promote national unity.
Governor Zulum added that NEC’s decision is intended to unify the nation’s approach to tax reform and to provide clear direction for the administration’s plans.
Earlier, Bayo Onanuga, the President’s Special Adviser on Information and Strategy, clarified misconceptions about the bills. He explained that the proposed VAT system seeks to create a more balanced approach that considers where products are consumed, ensuring that all regions, especially the North, benefit fairly from VAT revenue distribution.
