Proposed tax reform bills not against north, presidency assures northern governors

Bayo Onanuga, special adviser to the president on information and strategy, has assured Northern governors that the recently proposed tax laws will not increase the number of taxes.

Onanuga spoke on Thursday in a statement posted on social media, addressing the governors’ concerns over the proposed tax laws.

On October 3, President Bola Tinubu had asked the national assembly to consider and pass four tax reform bills.

The proposed laws include the Nigeria tax bill, tax administration bill, and the joint revenue board establishment bill.

Reacting to the development, the Northern States Governors Forum (NSGF), representing 19 northern states, collectively opposed the proposed bills, following a joint meeting with the northern traditional rulers council at the Kaduna government house on October 28.

The governors asked the national assembly to reject any legislation that may harm the region’s interests, calling for equitable and fair implementation of national policies and programmes to prevent marginalisation of any geopolitical zone.

Onanuga explained the proposed laws were not proposed by Tinubu to disadvantage any part of the country as they were designed to improve lives of Nigerians and optimise existing tax frameworks.

“The tax rates or percentages will remain the same under these reforms, as they focus on ensuring a more equitable distribution of tax obligations without adding to the burden on Nigerians,” Onanuga said.

“The reforms will not lead to job losses. On the contrary, they are structured to stimulate new avenues for job creation by supporting a dynamic, growth-oriented economy.

“Importantly, these laws will not absorb or eliminate the duties of any existing department, agency, or ministry. Instead, they aim to harmonise revenue collection and administration across the federation to ensure efficiency and cooperation.”

Speaking on the issue in the statement, Onanuga said the current tax administration lacks coordination among federal, state, and local tax authorities, and often results in overlapping responsibilities, confusion, and inefficiency.

The presidential aide said the proposed reforms are intended to reduce the inefficiencies.

“The proposed laws aim to coordinate efforts between different tiers of government, resulting in better tax resource management and greater clarity for taxpayers,” he said.

“Under existing laws, taxes like Company Income Tax (CIT), Personal Income Tax (PIT), Capital Gains Tax (CGT), Petroleum Profits Tax (PPT), Tertiary Education Tax (TET), Value-Added Tax (VAT), and other taxing provisions in numerous laws are administered separately, with individual legislative frameworks.

“The proposed reforms seek to consolidate these multiple taxes, integrating CIT, PIT, CGT, VAT, PPT, and excise duties into a unified structure to reduce administrative fragmentation.

“On the proposed derivation-based VAT distribution model, which the northern governors oppose, it must be stressed that the new proposal, as enunciated in the bill, is designed to create a fairer system.”

Onanuga said the ongoing tax reforms seek to address the inequity in the current derivation model for VAT distribution, which is based on where the tax is remitted rather than where goods and services are supplied or consumed.

He said the proposal before the national assembly outlines a different form of derivation “which considers the place of supply or consumption for relevant goods and services”.

“This means that states in the northern region that produce the food we eat should not lose out just because their products are VAT-exempt or consumed in other states.”

Calling for urgency, the presidential aide said there is no better time than now for the national assembly to consider these bills, which will overhaul the tax systems and create the revenue needed by all tiers of government to fund the development required to benefit the country and its people.

On October 29, Taiwo Oyedele, the chairman of the presidential committee on fiscal policy and tax reforms, had said the proposed amendment to the VAT distribution would create a fair system.