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OUR RESERVATIONS ON TAX REFORM BILLS – NORTHERN GROUP
Ripples over the endorsement of the Tax Reforms Bills currently before the National Assembly by the governors continued as a northern pressure group, the league of Northern Democrats (LND), has said that limiting derivation to areas of consumption will perpetuate regional inequality in Nigeria.
The northern group however commended the governors for the endorsement of the tax reform bills.
The Director of Publicity of the league, Dr, Ladam Salihu, in a statement yesterday said that the proposed increase of derivation to 30% risks perpetuating regional inequalities in Nigeria.
He said the governors’ endorsement of a revised Value Added Tax on Tax and Fiscal Reforms will benefit disproportionately at the expense of others, particularly the North.
According to the northern pressure group, ”The modernized Nigeria’s fiscal system, enhance stability and align with global best practices. However, there is one critical issue overlooked in the Governors Forum’s communique ”
He said that the group welcomes the governors recognition of the need for comprehensive tax reforms to ensure that
resources are distributed based on actual economic activity and contribution.
it however added that cornerstone of LND’s recommendations remains non-negotiable, stressing ”Without this definition,
that requires urgent resolution before LND can fully endorse the reforms: the definition of meeting with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, must be addressed
According to the group, ”For any tax reform to achieve equity, fairness and sustainability, that “derivation” must be at the conclusion of population aligns substantially with the recommendations of LND’s Technical Committee ”
The northern group raised critical concern Over “Derivation” to seek and to achieve in the first place absence of clarity on this matter which undermines the principles of equity that the reforms is based.
The League said that its acknowledges and supports the recent clearly and unambiguously defined to mean the place of consumption.
According to it ”This was a (VAT) sharing formula of 50% based on equality, 30% based on derivation and 20% based on population not only aligns with the realities of modern taxation but also promotes accountability and incentivizes regions to develop their economic capacities.
Accordingly, it said, ”Until this critical issue is resolved, LND will withhold its full support for the tax reform, these reforms succeed in fostering fairness, growth and prosperity for our people and beneficial outcomes for all Nigerians.
”As stakeholders in the Nigerian project committed to our regional and national agenda, we urge the NGF and the Presidential Tax Reform Committee to incorporate this fundamental clarification, and all other amendments made by the LND, including the
development.
”LND reiterates its readiness to work collaboratively with all parties to ensure inheritance tax clause, into their framework to guarantee that the reforms deliver equitably.”
