Proposed tax reform not targeting the north – Presidency
Mr. Bayo Onanuga, Special Adviser to the President on Information and Strategy, has clarified misconceptions about the tax reform proposed by the current administration.
In a statement on Thursday in Abuja, he addressed the opposition raised by the Northern Governors’ Forum, led by Gov. Muhammed Inuwa Yahaya of Gombe State, against the new derivation-based model for Value-Added Tax (VAT) distribution included in the tax reform bills before the National Assembly.
He noted that the meeting also included traditional rulers from the region, led by Muhammadu Sa’ad Abubakar III, the Sultan of Sokoto.
Onanuga explained that the tax reform bills, endorsed by President Bola Tinubu and the Federal Executive Council, are designed to streamline Nigeria’s tax administration processes, improve efficiency, and eliminate redundancies.
“These reforms emerged after an extensive review of existing tax laws. The National Assembly is considering four executive bills designed to transform and modernize Nigeria’s tax landscape.
“First is the Nigeria Tax Bill, which aims to eliminate unintended multiple taxation and make Nigeria’s economy more competitive by simplifying tax obligations for businesses and individuals across the country.”
“Second, the Nigeria Tax Administration Bill (NTAB) proposes new rules for the administration of all taxes in the country.”
“Its objective is to harmonize tax administrative processes across federal, state, and local jurisdictions to ease compliance for taxpayers throughout the country,” he said.
According to him, the third bill, the Nigeria Revenue Service (Establishment) Bill, seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS).
Onanuga assured that the reforms would not increase taxes, lead to job losses, or absorb the duties of existing departments; instead, they aimed to optimize and simplify tax frameworks, ensuring a more equitable distribution of tax obligations.
He stated that the reforms also sought to consolidate multiple taxes into a unified structure, reducing administrative fragmentation.
Regarding the proposed derivation-based VAT distribution model, Onanuga explained that the new proposal aimed to create a fairer system by considering the place of supply or consumption for relevant goods and services.
He noted that the reform would benefit states in the Northern region that produce VAT-exempt goods, ensuring they do not lose out on revenue.
“These reforms are crucial to improving the lives of Nigerians and are not intended to undermine any part of the country,” Onanuga stated.
He added that the bills would overhaul the country’s tax systems, generating revenue for all tiers of government to fund development projects.
Proofreading by Uchechi Ojo, Sub-editor at NeptunePrime.
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