NEC calls for withdrawal of tax reform bill

The National Economic Council (NEC) has recommended the withdrawal of the Tax Reform Bill currently under consideration in the National Assembly.

NEC made the recommendation during its 142nd meeting at the Presidential Villa on Thursday in Abuja.

The meeting was chaired by Vice President Kashim Shettima and had in attendance state governors.

Following the meeting, Oyo State Governor Seyi Makinde addressed State House Correspondents, indicating that the decision to withdraw the bills was made to ensure stakeholders are involved in the discussion.

READ ALSO :Tinubu’s govt tax reforms not targeting North, says Presidency

This decision follows a Sunday meeting of the Northern Governors’ Forum (NGF), chaired by Gombe State Governor Inuwa Yahaya, where a consensus was reached to reject the derivation-based model proposed for Value Added Tax (VAT) distribution.

Clarifying the Northern governors’ stance, Nasarawa State Governor Abdullahi Sule stated that the VAT bill is viewed as inequitable to the northern region. He emphasized, “We can’t bring in President Tinubu and then oppose him. If you look at the composition of the meeting you will see that there are people from the APC and the PDP. Some don’t even have a political party. We sat down and took the decision together.”

Sule elaborated on the implications of the proposed model, stating, “By the time you say you are going to take something out of the sharing of the FAC and then say you are going to share something similar to something like that… it’s going to be another 13% derivation.”

He pointed out that northern states currently generate minimal VAT revenue, saying, “The 19 states of the north are generating very little when it comes to VAT at the moment.”

Earlier, Bayo Onanuga, the Special Adviser to the President on Information and Strategy, commented on the existing “misunderstandings and misgivings” surrounding the tax reforms initiated by the government. He highlighted the proposed derivation-based VAT distribution model, stating, “The new proposal… is designed to create a fairer system.”

Onanuga explained that the current VAT distribution method, based on tax remittance location rather than the consumption or supply of goods, is being reformed to address its inequities. He remarked, “This means that states in the Northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states.”