The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, emphasized the urgency of passing the proposed Tax Reform Bills, stating that most Nigerians are struggling and urgent action is needed to address their challenges.
Speaking during an interview with Arise News on Wednesday, Oyedele responded to criticisms from Borno State Governor, Professor Babagana Zulum, who had raised concerns about the haste in enacting the bills and called for further consultations.
Oyedele explained that the 60 percent derivation proposed for the Value Added Tax (VAT) distribution is necessary to promote equity in the VAT sharing system and stimulate economic activities across the country.
Governor Zulum had previously argued that the tax reforms, especially the VAT provision, would disproportionately benefit Lagos and Rivers states, which would result in losses for northern states.
He called for a pause in the legislative process to address these concerns.
In response, Oyedele refuted the claims of rushing the reforms and stressed that the reforms were essential to provide relief for the majority of Nigerians currently struggling with poverty and inflation.
“We are at a stage where the majority of our people are struggling and living in multi-dimensional poverty,” Oyedele said.
“Small businesses are burdened with over 60 official levies and taxes, and more than 200 unofficial ones.
People are struggling to feed themselves due to escalating food inflation, and unemployment rates remain high,” he said.
He added that immediate action is necessary, likening the situation to the global response to the COVID-19 pandemic, where laws were passed rapidly due to the emergency.
“This is an emergency.
If you want to provide relief for your people, you should do it quickly,” he said.
Oyedele also clarified that the tax reforms had been in the works for over a year and that his team had engaged with governors, including sharing drafts of the bills.
“We’ve had meetings with governors, but often, we were allotted very little time.
We’ve done our part, and the bills have been in the National Assembly for over a month,” he explained.
Despite the ongoing scrutiny in the National Assembly, Oyedele emphasized that the bills should be finalized quickly to provide necessary relief to Nigerians.
He acknowledged that while there is more attention on the issue now, it offers an opportunity for further engagement.
The proposed tax reforms, which include the introduction of a derivation principle for VAT allocation, have stirred controversy, particularly among northern elites who argue that the changes may not benefit their region.
The reforms seek to address inequities in the current distribution model of VAT, where a significant portion is allocated to the federal government and the states, with a portion based on population and equality.
Oyedele concluded by expressing his team’s willingness to engage further, stating that the increased focus on the issue is positive for the country’s development.
