Governor of Ogun State, Dapo Abiodun, addressed the controversy surrounding the Federal Government’s proposed tax reform, attributing much of the opposition to misinformation and misunderstanding.
Speaking with the News Agency of Nigeria (NAN) on Thursday at the Africa Investment Forum, Market Days 2024, in Rabat, Morocco, the governor emphasized that the reform, when properly understood, would be seen as beneficial to states and subnational governments.
“The resistance to the proposed tax reform stems from gross misinformation and misinterpretation,” Abiodun said.
“Once people are better informed, they will have a much more positive appreciation of what the tax reform represents,” he continued.
He highlighted the reform’s potential to enhance state revenues and improve the financial landscape for federating units.
“The proposed tax reform, subject to a few suggestions, will put states in a much better position than the status quo.
Unfortunately, misconceptions arose because some stakeholders didn’t take the time to fully understand the reform, coupled with suspicion about its intentions,” he explained.
Governor Abiodun expressed confidence in the reform, noting ongoing efforts at the Governors’ Forum to engage stakeholders and clear doubts.
“We’re having thorough engagements, and I believe that as time passes, people are beginning to appreciate what the reform truly represents,” he said.
“By next week, you’re likely to see a better understanding from stakeholders.
It is not what they initially thought it was, and there are more benefits than concerns,” the governor stated.
The governor described the reform as consumption-oriented, focusing on Value Added Tax (VAT).
He pointed out that the current VAT system disproportionately disadvantages Ogun State, despite its status as Nigeria’s industrial hub.
“A lot of production takes place in Ogun State, but companies often have their head offices in Lagos, causing VAT revenues to accrue there instead.
This reform aims to correct such disparities, ensuring that value-added processes benefit the states where they occur,” Abiodun stated.
He also called for fine-tuning the reform to ensure equitable benefits.
“For instance, if a bag of cement is produced in Ogun State but sold elsewhere, we must ask: where is the most value added? At the point of sale or where it’s mined, packed, bagged, and transported?”
Abiodun concluded by reaffirming his belief that the proposed tax reform would ultimately be in the best interest of all Nigerians, fostering a more balanced and efficient tax system.
NAN
