The 36 state governors of Nigeria have unanimously called for the immediate withdrawal of the National Tax Reforms Bill, a move that challenges the comprehensive efforts of the Presidential Fiscal Policy and Tax Reforms Committee led by Taiwo Oyedele.
The governors made their demands during a meeting of the National Economic Council, Nigeria’s highest economic advisory body, on Thursday, October 31.
Oyo State Governor Seyi Makinde announced the decision, stating that the council agreed it was crucial to conduct further consultations before proceeding with the bill.
He emphasised the need for consensus-building to ensure that all stakeholders fully understand the proposed reforms.
“The council recommends the withdrawal of the bill currently before the National Assembly to allow for wider consultations and to clarify any misinformation,” Makinde stated.
The proposed tax reforms aim to overhaul Nigeria’s taxation system, with a focus on fair taxation, responsible borrowing, and sustainable spending.
Despite a presentation by Oyedele detailing the intended benefits of the reforms, which include streamlining tax processes and establishing a unified revenue service, the governors remained unconvinced.
The reforms, stemming from a review of existing tax laws, encompass four executive bills, including the Nigeria Tax Bill and the Nigeria Revenue Service (Establishment) Bill.
These bills seek to simplify tax obligations, harmonize administrative processes, and create a more efficient tax framework across federal and state jurisdictions.
However, the Northern Governors’ Forum, representing 19 governors from the northern region, has expressed opposition to the reforms, particularly regarding the proposed derivation-based model for Value-Added Tax (VAT) distribution.
They argue that the new model undermines the interests of northern states, potentially leading to job losses and economic instability.
In response to the governors’ concerns, the Presidency defended the tax reforms, asserting that they would not result in job losses and would instead foster economic growth.
Special Adviser to the President on Information and Strategy, Bayo Onanuga, emphasised that the proposed changes are designed to optimize existing tax frameworks without increasing the overall tax burden on citizens.
As the National Assembly considers the governors’ request, both the Senate and the House of Representatives unexpectedly adjourned plenary until November 19, complicating the timeline for the proposed reforms.
While the House leadership remains open to discussing the bill on its merits, there is a growing sentiment among lawmakers that the current climate may not be conducive to significant tax reform.
Meanwhile, some northern governors are reportedly mobilizing against the proposed tax changes, with discussions ongoing about a collective stance.
As tensions rise over the proposed reforms, the future of the National Tax Reforms Bill remains uncertain, highlighting the complexities of Nigeria’s fiscal policy landscape.
