The Coalition of Northern Groups in collaboration with Northern Elders Forum on Monday said the Federal Government’s Value Added Tax will further exasperate hardship in the region.
Speaking during a one-day town hall meeting on the theme: Tax reform bill: A catalyst for economic growth or a burden on the people?.
Our correspondent reports that the town hall which held at Gombe State University drew civil society organisations, students, academics and political party members.
Speaking earlier, CNG Gombe Coordinator Mustapha Deba, noted that the coalition has meticulously analysed the bill frowning at significant concerns.
According to Deba, the reform if allowed to scale would bear far-reaching adverse effects on the region, including Gombe State.
He itemised disproportionate impact on northern states, potential for increased economic disparity, lack of transparency and data-driven decision making, saying
“The proposed reform’s emphasis on derivation appears to favour states with higher VAT-generating activities. predominantly in the South, such as Lagos. This shift could significantly reduce the revenue shares allocated to Northern states, where economic activities are comparatively lower. The resultant financial shortfall would impede our region’s development initiatives and exacerbate existing disparities.”
“By altering the VAT sharing formula without adequate safeguards, the reform risks widening the economic gap between the North and South. Such an outcome could foster social unrest, trigger migration to economically stronger states, and precipitate other socio-economic challenges. We must avoid any policy that could deepen regional inequalities
“A major point of contention is the absence of comprehensive data and analysis to support the proposed changes. The government has not sufficiently demonstrated how the new VAT regime would benefit the entire nation equitably. Without transparency and robust data, the potential negative impacts cannot be accurately assessed, leaving us in a precarious position.”
The state coordinator called for transparent and equitable revenue sharing, data-driven policy decision, consultative approach, saying “As we reflect on the implications of the Tax Reform Bill, it is imperative that we advocate for a tax system that fosters national unity and economic prosperity. We cannot afford to endorse reforms that deepen existing divides or marginalise any segment of our society,” he added.
He continued saying, “We urge the Nigerian Senate to pause the consideration of this Bill, heed the concerns raised by the CNG and other stakeholders, and engage in further consultations. Our collective goal should be to craft a tax reform policy that serves the interests of all Nigerians, promoting sustainable economic growth and equitable development.”
Delivering paper on the theme, Professor Sadiq Abubakar, noted that these reforms have ignited considerable societal debate, often revealing the polarising sentiments experienced by various stakeholders across the nation, especially regarding their implications for Northern Nigeria.
He stated, “The proposed reforms are expected to streamline tax administration processes and frameworks, increase overall government revenue, and stimulate sustainable economic growth to mention but a few Nevertheless, these reforms would come with socio-economic repercussions, particularly for Northern Nigeria, which struggles with distinctive challenges ranging from insecurity, poverty. unemployment, and food insecurity. Proposed changes to Value Added Tax (VAT) rates, distribution of VAT revenues, development levies, and taxation on various sectors including agriculture and religious organisations, could exacerbate existing economic hardships and cultural tensions.
“Some sections of the Bills clash with religious values, risking the marginalization of some faithful. To avoid exacerbating socio-economic disparities and to establish a fair and more inclusive taxation framework, policymakers must consider the unique cultural and economic landscapes of all regions, especially Northern Nigeria. Engaging in comprehensive dialogue with varied stakeholders will foster legislative outcomes that respect the rights and welfare of all citizens, ensuring a balanced approach to taxation that promotes national unity and economic stability. In light of these considerations, the committee has made the following recommendations no increase in VAT should be implemented until there are clear signs of economic improvement, explicit definition of ‘derivation’ to reflect actual consumption locations, thus ensuring fair revenue distribution; exemption of entities involved in Islamic finance from certain tax structures, propose tax exemptions for inheritance to respect Islamic laws and maintain unity.”
On his part, Chairman of the occasion, Barrister Umar Gurama, urged participants to collaborate lawmakers in sensitising communities and gathering their inputs before such reforms become law.
