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The National Economic Council (NEC), led by Vice-President Kashim Shettima and comprising state governors, has recommended the withdrawal of proposed tax reform bills currently in the National Assembly.
Following a recent NEC meeting, Oyo State Governor Seyi Makinde announced the decision, highlighting the need for broader stakeholder engagement due to the controversies surrounding the bills.
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This recommendation comes on the heels of a meeting of the Northern Governors’ Forum (NGF), chaired by Gombe State Governor Inuwa Yahaya, which voiced opposition to a derivation-based model for Value Added Tax (VAT) distribution proposed in the new tax bills.
Governor Abdullahi Sule of Nasarawa clarified that northern governors oppose the VAT bill, arguing it would disproportionately disadvantage their region.
Sule emphasized that the governors support President Bola Ahmed Tinubu and had unified in their decision despite political differences among them.
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He explained that the proposed model would unfairly affect northern states, which currently generate less VAT revenue.
Earlier, Bayo Onanuga, Special Adviser to the President on Information and Strategy, addressed the misunderstandings related to the tax reform, stating that the new proposal aims to create a more equitable distribution system.
He explained that the existing VAT distribution model is based on tax remittance locations rather than where goods are consumed, a system the reform seeks to rectify to ensure fair compensation for producing states, particularly in the North.
