The 19 governors from Northern Nigeria have voiced strong opposition to the Federal Government’s Tax Reform Bill, recently submitted to the National Assembly. At the heart of their concerns is a proposed shift to a Derivation-based Model for distributing Value Added Tax (VAT), which they argue would disadvantage northern and less industrial regions.
Meeting in Kaduna under the Northern States Governors’ Forum (NSGF), the governors, led by Gombe State’s Muhammad Yahaya, issued a communique expressing their objections. They were joined by northern traditional rulers, the Chief of Defence Staff, General Christopher Musa, and other stakeholders.
The proposed reform, developed by a panel led by Taiwo Oyedele, would adjust the distribution of VAT revenue to favor the locations where goods and services are consumed, as opposed to the current system, which allocates VAT based on company headquarters. Northern states, many of which prohibit the sale of alcohol under Sharia law, currently benefit from VAT collected on alcohol sales nationwide, a practice the reform would end.
The communique argued that the shift would negatively impact the Federal Accounts Allocation Committee’s revenue distribution. The governors urged Northern representatives in the National Assembly to reject the bill, stating, “The contents of the reforms are against the interest of the North and other sub-nationals.”
While the governors emphasized their support for policies that encourage growth, they called for “fairness in the implementation of national policies,” to ensure equitable treatment across geopolitical zones. They also appealed for patience from Nigerians, assuring citizens that measures to ease economic hardship are underway.
