President Bola Tinubu’s proposed tax reform bill has encountered significant opposition as regional tensions escalate over the allocation of Value Added Tax (VAT), News About Nigeria reports.
The bill, which seeks to streamline Nigeria’s tax codes and improve revenue generation, proposes allocating VAT based on state-generated revenue instead of population size, sparking heated debate between Nigeria’s northern and southern states.
Northern lawmakers have voiced strong concerns, arguing that the proposed system disadvantages their states by failing to account for the economic realities of the region.
They contend that states in the north, which have lower economic activity compared to their southern counterparts, could face severe fiscal disadvantages under the new system.
As a result, these lawmakers have called for further dialogue and consultation before moving forward with the bill.
In contrast, southern states, which typically generate higher revenues, support the VAT allocation method based on revenue, believing it would better reflect the financial contributions of each state to the national economy.
The proposal has been hailed as a potential solution to Nigeria’s longstanding revenue imbalance and a way to reduce dependency on federal allocations.
The bill’s delay highlights the complex regional dynamics at play, as lawmakers continue to push for a fairer and more equitable tax system.
With the proposed tax reforms crucial to bolstering Nigeria’s fiscal policy, both the federal government and regional lawmakers are under pressure to resolve their differences and reach a consensus on the issue.
“The bill aims to address Nigeria’s economic challenges,” said one official, “but it must balance the interests of all regions for the country to move forward effectively.”
