Northern Governors Unite Against Tinubu’s Tax Reform Proposal, Citing Regional Disadvantages

The Northern States Governors’ Forum (NSGF), representing 19 northern states, has collectively rejected President Bola Ahmed Tinubu’s proposed tax reform bill, which includes a significant amendment to the distribution of value-added tax (VAT). The governors voiced their concerns during a strategic meeting held in Kaduna and issued a communiqué detailing their stance on the matter.

Principal Issues Raised

The governors expressed strong disapproval of the proposed shift to a Derivation-based Model for VAT distribution, arguing that it would disproportionately disadvantage northern states and other less industrialised regions. Currently, VAT is remitted based on the location of a company’s headquarters rather than where goods and services are consumed. The proposed amendment would alter this formula, leading to potential revenue losses for northern states that are less industrialised.

Muhammad Yahaya, the chairman of the NSGF and governor of Gombe State, read the communiqué, which emphasised that the reforms are not in the best interest of the northern region. The governors called on members of the National Assembly to reject any legislation that could jeopardise the well-being of their constituents.

Economic Implications

The rejection comes at a time when many northern states are already grappling with economic challenges exacerbated by rising fuel prices and inflation. The governors urged for equitable implementation of national policies to ensure that no geopolitical zone is marginalized. They stressed that while they are not opposed to policies aimed at national growth, fairness and equity must be prioritised.

The governors also addressed broader economic issues affecting citizens, appealing for calm as both state and federal governments work on measures to alleviate hardship. They acknowledged the vital role traditional institutions play in maintaining peace and security in their regions.

Broader Context

This rejection reflects ongoing debates about resource control and fiscal policies in Nigeria. Many northern states have historically relied on federal allocations due to lower levels of industrialisation compared to their southern counterparts. The proposed tax reforms have reignited discussions about how resources are distributed across the country and who benefits from these changes.

.The unanimous rejection of President Tinubu’s proposed tax hike by the northern governors indicates a rift between regional leaders and federal policies perceived as detrimental to their interests. The call for equity and fairness in policy implementation is more pressing than ever as northern states seek to protect their economic interests amid ongoing national challenges

By Joseph Johnston,
Youth Editor,
Egogonews Hub

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