Babajimi Benson, the representative for Ikorodu Federal Constituency in Lagos State, has rejected claims that President Bola Ahmed Tinubu’s tax reforms are designed to foster regional divisions between Nigeria’s North and South.
In an interview on Friday, Benson emphasized that the reforms aim to drive equitable economic growth and modernize Nigeria’s outdated tax laws.
Benson critiqued Nigeria’s current tax system, which he said was based on legislation from the 1930s and burdened with inefficiencies and inequities.
He argued that the proposed reforms would benefit the entire country, not just specific regions, as some critics have suggested.
Among the key provisions of the new tax policy, Benson highlighted the removal of Pay-As-You-Earn (PAYE) tax for civil servants earning minimum wage.
He also pointed out that the reforms address a long-standing issue with the centralization of Value Added Tax (VAT) revenue, which has disproportionately benefited major cities like Lagos, Rivers, and the Federal Capital Territory (FCT).
The new system ensures VAT revenues are allocated based on consumption and production in each state, promoting a fairer revenue-sharing model.
Benson noted that the reforms would incentivize state governments to foster business-friendly environments, leading to stronger local economies and higher tax revenues.
He also praised the alignment of the reforms with global tax practices, particularly in eliminating double taxation for foreign companies outsourcing jobs to Nigeria, which could attract significant foreign investment.
To ensure fairness across states, Benson highlighted the introduction of a ₦300 billion stabilization fund to assist states struggling to meet revenue targets.
He called on Nigerians to support the reforms and avoid politicizing the policy.
