The pan-Yoruba socio-cultural and socio-political organisation, Afenifere, said on Thursday that the tax reform proposed by the Federal Government is not targeted at any region.
DAILY POST reports that President Bola Tinubu recently submitted four bills to the National Assembly aimed at streamlining Nigerian tax administrative processes, enhancing efficiency and eliminating redundancies across the national tax operations.
However, the Northern State Governors’ Forum, NSGF, and Northern Council of Traditional Rulers and Chiefs recently, at their joint meeting in Kaduna, expressed displeasure over the bills, particularly the aspects concerning the derivation-based model for the distribution of value-added tax, VAT, among the country’s federating units.
Responding to their reservations, however, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, clarified that the proposed reform of tax laws was meant to correct the anomalies in current tax laws, particularly the VAT distribution model.
He emphasised that the current sharing formula is 15 per cent for the federal government, 50 per cent for states and 35 per cent for the local government councils, whereas the new bill is proposing 10 per cent for the federal government, 55 per cent for states and 35 per cent for the local governments as contained in Section 22 (12) of the Nigeria Tax Administration Bill.
The National Publicity Secretary of Afenifere, Jare Ajayi, in a statement, maintained that no region in the country should entertain any fear regarding the distribution of the proceeds of VAT as being proposed.
Afenifere opined that using or including ‘derivation’ as a factor of distribution would not deprive the northern states or any other state of what is due to them.
It noted: “The first, Nigeria Tax Bill, aims to eliminate unintended multiple taxation and make the economy more competitive; the second, Nigeria Tax Administration Bill, proposes a set of new rules that will harmonize tax administrative processes across federal, state and local jurisdictions.
“This was meant to ease compliance by taxpayers. The third, the Nigeria Revenue Service (Establishment) Bill, seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service, while the fourth, the Joint Revenue Board Establishment Bill, proposes the creation of a Joint Revenue Board to replace the Joint Tax Board.
“Since people consume items and patronise services in every state, there is no reason why any state will not benefit from the proceeds of VAT collected in their domains, especially going by the relevant section of the proposed bill as well as Section 163(b) of the 1999 Constitution which talks about derivation in the distribution of revenue from the Federation Account.”
Afenifere stressed that the new arrangement stands the chance of encouraging states to do more in generating incomes locally and in contributing more to the national till “if what a state would get is tied to how much such a state contributed.”