In the current political context of the Northern Region of Nigeria, Governor Sule’s recent statements, following the communiqué issued by the Northern Governors’ Forum, demonstrate tensions over the proposed tax reform, particularly with regard to the distribution of Value Added Tax (VAT).
Speaking on Channel Television, Governor Sule highlighted the role of the Northern States in the election of Tinubu, emphasizing their commitment to his presidency. “We cannot support Tinubu’s presidency, the Northern States contributed massively to Tinubu becoming president, and then we would turn our backs on him,” Sule said.
It is important to note that the objection of the Northern Governors is not to Tinubu’s administration itself, but rather to the distribution of VAT, which is a major criticism of the Northern Governors.
The Tax Reform Bill, introduced in the Senate and House of Representatives on October 3, proposes significant adjustments to Nigeria’s revenue structure. Key measures include renaming the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS) and exempting oil and gas exports and humanitarian projects from VAT.
However, northern leaders have expressed concerns about the VAT distribution formula, fearing potential disadvantages for northern states. “We have noted one point in this bill, that point is about VAT; nobody is against anything. We are discussing the VAT sharing formula. We have the right to agree or disagree,” Sule clarified, calling for equitable distribution of VAT that takes into account regional needs.
Balancing regional and national interests is essential to ensure a fair distribution of fiscal resources, while ensuring development and prosperity for the country as a whole. These political tensions underscore the importance of constructive dialogue and coordination among different stakeholders to achieve tax reforms that benefit all.