Governors soften stance on Tinubu’s Tax Reform Bills amid clarifications on VAT distribution

Governors are showing signs of easing their opposition to President Bola Tinubu’s proposed Tax Reform Bills, following new insights into the revenue-sharing framework.

During a Channels Television town hall discussion, Nasarawa State Governor Abdullahi Sule suggested that the initial resistance from governors could have been avoided if they had been briefed earlier about the proposed 60% Value Added Tax (VAT) distribution model aimed at promoting equity.

Speaking via telephone at the end of the session, Sule noted, “With better communication and understanding of the VAT structure, the governors might have reconsidered their call for the bills’ withdrawal.”

“If Mr. Taiwo Oyedele had informed the governors that a new model of 60% VAT distribution for better equity is part of the reform, there wouldn’t have been much disagreement from the onset. This Town Hall conversation was what the Governors’ Forum requested before proceeding with the bill’s consideration.”

Governor Sule also commended the proposed reforms for their focus on eliminating multiple taxation and correcting the lopsidedness in VAT proceeds distribution, an issue he is familiar with from his private-sector experience.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reform, clarified several misunderstood aspects of the bills during the town hall. According to Oyedele:

The reform exempts vulnerable Nigerians from personal income tax, shifting the burden to individuals earning ₦1.5 million or more annually.

The current VAT distribution model—20% derivation, 50% equality, and 30% population—would be replaced. The proposed model attributes 60% of VAT to the state of supply and consumption rather than where companies are headquartered, promoting fairness.

The new formula discourages individual states from attempting to administer VAT as a state tax, which could lower revenues and burden businesses.

Claims that the bills aim to dissolve public agencies like NASENI and TETFUND were refuted as baseless.

Former Speaker of the House of Representatives, Yakubu Dogara, praised the reform for its potential to unlock $250 billion in revenues for Northern Nigeria through livestock and mineral resource exploration. Dogara urged Northern leaders to adopt a leadership-driven approach rather than a regional or religious one, saying:

“The time for reform is now, not tomorrow. The bills are well-intentioned and will spur economic revival and wealth creation for Nigerians.”

Dogara also highlighted the potential of the global $2.5 trillion livestock market, emphasizing the North’s opportunity to earn $25 billion by leveraging the recently created Livestock Ministry.

Mallam Buba Yusuf, CEO of Global Investment and Trade Company, described the bills as essential for Nigeria’s economic revival, urging citizens to engage directly with the content rather than relying on misinformation. He stated:

“The bills are well-envisioned for competitive revenue generation and equitable distribution. Nigerians, especially Northerners, should read the bills to understand their transformative potential.”

The tax reform discussions, anchored on fairness and economic inclusivity, signal a critical turning point for the nation. Stakeholders, including governors, are now expected to reassess their positions in light of these clarifications and renewed calls for implementation.