Nigeria finds itself embroiled in a heated debate over President Bola Tinubu's proposed Tax Reform Bills.
These bills, which include the Nigeria Tax Bill 2024, the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, have sparked significant controversy across the nation.
The reforms stem from recommendations by the Presidential Fiscal Policy and Tax Reform Committee, aiming to replace the National Tax Policy with a more comprehensive framework.
Central to the controversy is the proposed method of distributing Value Added Tax (VAT) revenue. The bills suggest allocating 60% of VAT based on the derivation principle, which has drawn sharp criticism from Northern elites. They argue that this approach could disproportionately benefit states like Lagos, where many company headquarters are located, at the expense of Northern regions.
As one Northern stakeholder expressed, "The VAT arrangement would favor Lagos and a few other Southern states."
The socio-cultural organizations in Nigeria have taken varied stances on these reforms. Ohanaeze Ndigbo and Afenifere generally support the bills, seeing them as opportunities for economic rejuvenation.
Okechukwu Isiguzoro, Factional Secretary-General of Ohanaeze, stated, "The tax reform bills represent a transformative opportunity for the rejuvenation of Small Medium Enterprises (SMEs) and the enhancement of the fortunes of Nigerian workers."
He emphasized that the reforms could eliminate double taxation and foster a fair business climate, particularly benefiting the industrious Igbos.
Conversely, the Arewa Youths Forum (AYF) has expressed mixed feelings. Their concerns revolve around equity and fairness, fearing that the reforms might impose a disproportionate burden on the Northern region. Yerima Shettima, President General of AYF, highlighted, "Our primary concern stems from the perception of inequitable distribution of resources and infrastructure development across the country."
Afenifere's National Publicity Secretary, Comrade Jare Ajayi, countered Northern leaders' concerns by asserting that every state stands to benefit from the VAT proceeds.
He argued, "Since people consume items and patronize services in every state, there is no reason any state will not benefit from the proceeds of VAT collected in their domains."
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