Tax Reform Tussle: Northern Governors Seek to Block Harmful Amendments

Northern Governors Urge NASS to Block Unfavorable Amendments

“Agriculture should not only be seen as a means to feed our people but also as a catalyst for industrialization...”

Northern Governors Forum advocates for Traditional Institutions' role in achieving sustainable peace and security, combating crimes, and promoting community engagement.

The Northern States Governors Forum has made its stance clear on the recent Tax Reform Bill, strongly disapproving of its potential impact on the region's interests. In a joint statement issued after a meeting with the Northern Traditional Rulers Council in Kaduna on October 28, the governors expressed concerns about the proposed reforms' effects on regional economies and revenue allocation.

Concerns:

Alteration of VAT Distribution Model: The amendment seeks to change the distribution model of Value Added Tax (VAT) revenue to one based on derivation, allocating funds according to service provision and goods sales locations, rather than company headquarters and tax offices.

Regional Economic Impacts: The governors worry about the potential harm to regional economies and revenue allocation, emphasizing the need to protect the interests of northern states and other sub-national regions.

Revenue Allocation: The proposed reforms could significantly alter the revenue allocation structure, potentially disadvantageing certain regions.

Meeting with Traditional Rulers:

The governors met with the Northern Traditional Rulers Council, including esteemed Emirs and Chiefs, to discuss the Tax Reform Bill's implications. This collaboration demonstrates the forum's commitment to addressing regional concerns and finding solutions that benefit all stakeholders.

The Forum's Stance:

The governors have issued a communique stating their united rejection of the proposed tax changes. They urge federal legislators to prioritize the welfare of all Nigerians by voting against any bill that would disadvantage sub-national entities. This call to action emphasizes the need for equitable revenue sharing and protection of regional interests.

Background:

Previous meetings between the Northern Governors and traditional rulers have addressed similar issues, such as VAT collection and economic challenges facing the region. The ongoing dialogue highlights the importance of cooperation and collective decision-making in shaping the region's economic future.The Northern States Governors Forum has strongly rejected the proposed tax reform bill, citing concerns that it would unfairly favor states with corporate offices at the expense of those where goods and services are consumed. This shift would significantly impact critical revenue streams for northern states and other regions lacking major corporate hubs.

Additional Concerns:

Unfair Distribution of VAT Revenue: The proposed changes would alter the distribution model of Value Added Tax (VAT) revenue, allocating funds based on service provision and goods sales locations rather than company headquarters and tax offices.

Economic Instability: The governors believe the reforms would harm the economic stability of northern states and undermine equitable revenue sharing among sub-national entities.

“The Northern Governors' Forum is not averse to any policies or programmes that will ensure the growth and development of the Country.

“However, the Forum calls for equity and fairness in the implementation of all national policies and programmes so as to ensure that no geopolitical zone is short-changed or marginalized,” the communique stated.

The Northern States Governors Forum is urging the Federal Government to take immediate action to address the widespread power outage in the region, caused by vandalism of electricity transmission infrastructure. Essentially, they're calling for swift repairs to restore electricity supply to affected areas.

This recent outage highlights the broader challenges facing Nigeria's power sector, including vulnerabilities in transmission infrastructure. The Electricity Act 2023 aims to address some of these issues by promoting decentralization, private investment, and renewable energy integration.

Major  Reforms:

° Decentralization: Allowing states to regulate electricity activities within their jurisdictions

° Renewable Energy: Encouraging investment in solar, wind, and hydroelectric power

° Transmission Infrastructure: Upgrades and protection against vandalism

These reforms offer potential solutions to Nigeria's persistent power challenges, but effective implementation will be crucial.

“This matter not only underscores the vulnerability of critical infrastructure, but also the need to build additional transmission lines and diversify our energy supply so as to better connect our region and improve our energy resilience,” the Governors argued.

The Northern Governors Forum recently convened to discuss the aftermath of the August "End Bad Governance" protests, acknowledging the urgent need to address youth restiveness. These protests, which occurred from August 1 to 10, 2024, were sparked by Nigeria's growing economic hardship and hunger, described as the "worst economic crisis in a generation.” The governors recognized that the protests highlighted the importance of proactive measures to empower youths and prevent them from being drawn into crime and social issues.

Highlights from the Northern Governors Forum:

Addressing Youth Restiveness: The governors identified the need to address the root causes of youth unrest, including economic hardship and lack of opportunities.

Investing in Education and Skills Training: To equip youths with skills and knowledge, the governors pledged to enhance investments in education and skills training.

Job Creation and Economic Empowerment: The governors also committed to creating jobs and economic opportunities to engage youths in productive pursuits.

Reducing Susceptibility to Crime: By providing alternatives to crime, the governors aim to reduce the vulnerability of youths to social issues.

The “End Bad Governance” protests, which resulted in casualties and arrests, demonstrated the widespread discontent among Nigerians, particularly youths, regarding the country's economic situation. The Northern Governors Forum's commitment to addressing these concerns is a crucial step towards promoting stability and development in the region.

“Particularly, we commend the untiring commitment of the Chief of Defence Staff General C. J Musa whose professionalism and innovative approach has made difference in security architecture of the Country at large. Nevertheless, more needs to be done to address pockets of challenges that abound in the Northern Region,” they said.

The Northern Governors Forum highlighted the vital role of Traditional Institutions in achieving lasting peace and security in the region. These institutions serve as a crucial link between the government and local communities, facilitating effective communication and collaboration. To leverage their influence, the Forum advocated for expanding the institutions' responsibilities, particularly in combating crimes like kidnapping, banditry, cattle rustling, communal violence, and farmer-herder conflicts.

Areas of Collaboration:

Combating Crimes: Traditional Institutions to work alongside security agencies to address kidnapping, banditry, and other security threats.

Community Engagement: Institutions to facilitate dialogue and understanding between local communities and government agencies.

Peacebuilding: Institutions to promote peace and stability through mediation and conflict resolution.

The governors also acknowledged recent successes against criminal groups, including the neutralization of high-profile bandits and terror leaders. They resolved to sustain these gains, ensuring continued peace and stability in the region. Appreciation was extended to the Federal Government and security forces for their efforts to safeguard communities, reaffirming their shared commitment to a safe and secure future for all Northern Nigeria residents.

“To achieve this, we resolved to provide adequate support to our farmers, including access to financing, modern farming techniques and infrastructure such as roads and irrigation systems.

“Agriculture should not only be seen as a means to feed our people but also as a catalyst for industrialization and job creation across the region. That can be achieved through re-industrialisation of the North especially by reviving the textile value chain and development other agro-allied industries.

“The Forum equally commiserates with other victims of terrorism, banditry and similar criminal activities in the North and Nigeria at large and stand in solidarity with them during these difficult times.

“We agreed to continue to work with the Federal Government and relevant agencies to provide the necessary support and relief to those affected.

“On the present economic hardship affecting the Country, the Forum is appealing to all citizens to remain calm, as the states and Federal Government are working hard to implement measures that will cushion effects of the hardship.”