•Approve 30% derivation, 20% based on population
•North jittery because it’s ill-prepared, Natasha explains
•Northern groups decry politicisation of issue
•ASUU insists move will destroy public varsities
CHIGOZIE AMADI
After many weeks of controversy, governors of the 36 states of the federation and the Presidential Tax Reform Committee, yesterday, agreed on modalities for sharing the Value Added Tax (VAT).
The governors, at the end of their meeting, endorsed the sharing of the VAT proceeds on the basis of 50 per cent equality, unchanged from what is currently in operation; 30 per cent derivation, from 20 per cent currently in operation and 60 per cent that was proposed by the Presidential Tax Reform Committee headed by Mr. Taiwo Oyedele.
The governors also agreed on 20 per cent sharing on population basis, from 30 per cent which is the current allocation before the tax reform proposal.
The tax reform deal came as Senate yesterday projected a N100 trillion aggregate expenditure for the 2026 fiscal year, and vowed to free funds it said were being held by some government organisations.
Chairman, Senate Committee on Appropriation, Senator Solomon Adeola (APC, Ogun West), made the disclosure during a Stakeholders Public Hearing and Interactive Session on the 2025 Appropriation Bill. The session had the theme, “The 2025 Budget of Restoration: Securing Peace, Rebuilding Prosperity.”
Chairman of the Senate Committee on Local Content, Senator Natasha Akpoti-Uduaghan, said some stakeholders in the north were jittery about the tax reform bills because the region was ill-prepared for such fiscal legislation.
At the same time, some northern groups urged Nigerians, particularly northerners, to be wary of political actors using the current tax reform debate as platform to advance their ambitions ahead of the 2027 general election.
However, Academic Staff Union of Universities (ASUU) reiterated its stance against the proposed Nigeria Tax Bill 2024, warning that it would spell doom for public universities in the country if implemented.
The communique of the governors’ meeting with members of the Presidential Tax Reform Committee in Abuja, held behind closed-doors, was signed by Chairman of Nigeria Governors’ Forum (NGF) and Governor of Kwara State, Alhaji Abdul Rahman Abdul Razaq.
The communique stated, “The Forum endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources: 50 per cent based on equality, 30 per cent based on derivation, and 20 per cent based on population.
“The Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws. Members acknowledged the importance of modernising the tax system to enhance fiscal stability and align with global best practices.
“We, members of the Nigeria Governors’ Forum (NGF) and presidential tax reform committee, convened on the 16th of January 2025 to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system, arrived at more resolutions.
“Members agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time, to maintain economic stability.
“The Forum advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
“The meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies in the bills
“The meeting supports the continuation of the legislative process at the National Assembly that will culminate in the eventual passage of the Tax Reform Bills.”
Yesterday’s meeting between the governors and members of the presidential committee marked a major breakthrough, as the northern states’ governors, emirs and chiefs had last year rejected the proposed tax amendment bills sent to the National Assembly by the federal government.
They said it was capable of jeopardising the wellbeing of the people in the region.
The northern leaders said they were not against any policy that would ensure the growth and development of the country, but called for equity and farness in the implementation of all national policies and programmes to ensure that no geopolitical zone was marginalised.
Their position was contained in a communique signed by Chairman of Northern Governors’ Forum, Governor Muhammadu Yahaya of Gombe State, after a joint meeting with the traditional council in Kaduna.
The communique read, “Forum notes with dismay the content of the recent Tax Reform Bill that was forwarded to the National Assembly.
“The contents blare against the interests of the north and other sub-nationals, especially the proposed amendment to the distribution of Value Added Tax (VAT) to Derivation-based Model.
“This is because companies remit VAT using location of their headquarters and tax office and not where the services and goods are consumed.
“In view of the foregoing, the Forum unanimously rejects the proposed Tax Amendments and call on members of National Assembly to oppose any bill that can jeopardise the well-being of our people.
“For the avoidance of doubt, the Northern Governor’ 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 farness in the implementation of all national policies and programmes so as to ensure that no geopolitical zone is short-changed or marginalised.”
Senate Projects N100 Trillion Budget
The senate projected a N100 trillion aggregate expenditure for 2026, vowing to free funds held by some government organisations.
The National Assembly is currently considering the N49.7 trillion 2025 Appropriation Bill submitted to a joint session of the two chambers of the federal legislature in December last year by President Bola Tinubu.
Chairman, Senate Committee on Appropriation, Senator Solomon Adeola (APC, Ogun West), revealed the figure during a Stakeholders Public Hearing and Interactive Session on the 2025 Appropriation Bill, with the theme, “The 2025 Budget of Restoration: Securing Peace, Rebuilding Prosperity.”
The session had in attendance the governor of Kaduna State, Uba Sani, professional bodies, non-governmental organisations, and heads of critical economic agencies of the federal government.
Adeola said the National Assembly was working to shore up the federal government’s revenue by freeing funds held by organisations, including the Nigerian National Petroleum Company Limited (NNPCL).
He said, “In the past, we borrowed money to stabilise the naira, so that the exchange rate can be somehow good and that we are not being threatened. To stabilise the naira, we were borrowing.
“CBN is doing a lot of things behind the scenes.
“When this administration came, it said there is no need for that. If you recall, we are operating a free economy. We must be seen to be operating that free economy and it throws everything to the table. No more subsidy, no more exchange rate difference, and no more electricity tariff.
“By so doing, what we are trying to do, this N49.7 trillion 2025 budget you are seeing, maybe by next year it will have doubled because by then, there is still a lot of our revenue that still need to be freed.”
Adeola said, “A lot of revenue has been held hostage by no other person than organisations, like the NNPC. The NNPCL still believes that there are still some elements of subsidy that are being treated as an operational expense in their documents that they still need to wipe out for more revenue to be freed and all other sundry items.
“By the time all this comes to pass, I can tell you maybe next time when we are gathered here, we will start having a budget of a minimum of about N100 trillion. So we are working round the clock, especially on this side of the divide, to ensure that we shore up our revenue.”
Senate President and Chairman of the National Assembly, Senator Godswill Akpabio, urged his colleagues and other critical stakeholders to make the 2025 budget one that prioritised the welfare of Nigerians.
Akpabio said, “Together, we must ensure that this budget is not a mere ledger of revenue and expenditure, but a living document that prioritises the welfare of every Nigerian.
“This is not an ordinary assembly, and this is not an ordinary moment. For we are not gathered here merely as legislators, public servants, or citizens, but as custodians of Nigeria’s destiny, stewards of its promise, and architects of its future.
“Our beloved nation faces trials that would shake the resolve of lesser nations, but I am here to affirm, with unshakable conviction, that within every challenge lies the seed of opportunity. The task before us is formidable, but it is neither beyond our reach nor beneath our determination.”
Meanwhile, the Bureau of Public Procurement (BPP) said it had saved Nigeria N1.9 trillion from contract fraud over the years. Director-General of BPP, Dr Adebowale Adedokun, stated this during the budget defence session with the Senate Committee on Public Procurement.
Adedokun said the agency set up June 14, 2007 remained a key stakeholder in the war against corruption in the country, especially as regards contract awards, inflation, and diversion.
He said, “The BPP has within the last 17 years been changing the landscape of public procurement in Nigeria by ensuring transparency, fairness and efficiency on contracts awards and execution.
“The BPP has been saving the country from loss of at least N40 billion annually to contract inflation, diversion of public funds, and poor service delivery. Records from our price intelligence unit indicate that total money prevented so far from being diverted to personal pockets from contracts award is N1.9 trillion.
“BPP has over the years been significantly contributing to increased revenue generation by the relevant agencies, like the Federal Inland Revenue Service (FIRS), Nigeria Pension Commission (PENCOM), among others.”
Natasha: North Jittery Because It’s Ill-Prepared
Chairman, Senate Committee on Local Content, Senator Natasha Akpoti-Uduaghan, has said some stakeholders in the north were Jittery over the tax reform bills because the region was ill-prepared for such fiscal legislation.
Akpoti-Uduaghan, representing Kogi Central Senatorial District, called for the revitalisation of northern Nigeria’s socio-economic and cultural heritage.
She urged northerners to embrace the vision of the late Sardauna of Sokoto, Ahmadu Bello, who led the region to prosperity in the 1950s.
The senator, according to a statement by her media aide, Arogbonlo Israel, made the appeal while speaking at the Sardauna Memorial Day in Kaduna.
She highlighted the importance of education and cultural preservation to achieve the envisaged economic transformation.
Akpoti-Uduaghan stated that in 1959, Nigeria’s groundnut export to the UK was valued at £27 million, equivalent of N3.6 trillion today, while current groundnut exports were only $3 million.
Akpoti-Uduaghan stated, “The only reason why the north is jittery about the Tax Reform Bills is because we are ill-prepared. If we were generating N3.6 trillion from one agricultural product, would we be bothered about the reforms?
“Hence, we must task our leaders with developmental mind-sets to stir up the entrepreneurial ecosystems so our lands and factories can be productive once again.
“Let’s act from a position of economic abundance for our region and country at large.”
She urged collaboration among northern leaders and civil society to achieve those goals.
According to her, “In 1959, Nigeria groundnut export to United Kingdom alone stood at £27 million, which has an equivalent purchasing power of N3.6 trillion today.
“The residue from the groundnut’s oil extraction was also exported to the UK as livestock feeds. Today, Nigeria’s groundnut exports sit at distant $3 million.
“The northern Nigeria’s cotton industry shaped the Liverpool cloth market in London, UK, between the 50s and 70s, while the Kaduna Textile Mill flourished, creating thousands of jobs.
“Today, the cotton industry in Nigeria is pretty much non-existent while this same industry generates $21 billion annually. That’s the thriving economy Sardauna helped create and left for us to improve upon.”
Northern Groups Decry Politicisation of Tax Reform
Some northern groups urged Nigerians, especially northerners, to be wary of political actors using the current tax reform debate as platform to advance their 2027 political ambitions.
They said certain political actors were deliberately manipulating public sentiment, disguising personal interests under the guise of regional or national concern, thereby, diverting focus on tax reforms to an agenda centred on the 2027 general election.
The groups, which comprised Nigeria First Project Initiative, Muryar Talaka Awareness Initiative, and Coalition of Northern Nigerian Students Forum, gave their position via a communiqué issued at the end of a one-day engagement with youth groups, students, and community-based organisations at Arewa House, Kaduna.
The engagement was on the theme, “Tax Reform Bills: Between the Facts and Politics.”
The communique was jointly signed by National Coordinator, Nigeria First Project Initiative, Comrade Hamza Saulawa; National Secretary, Muryar Talaka Awareness Initiative, Comrade Bishir Dauda; and Coordinator, Coalition of Northern Nigerian Students Forum, Sadi Garba Sadiq.
Participants emphasised the need for accountability, transparency, and visionary leadership, particularly from the northern states governors.
They stated, “Only transparent and committed governance can lift the region out of its current economic and social challenges.”
The participants said the reforms aimed to simplify the country’s tax structure, broaden the tax net to include more sectors, and encourage compliance while supporting economic growth.
They added that the benefits were crucial for long-term fiscal stability and sustainable development of the country.
The participants also called for caution and restraint in the ongoing debate over the tax reform bills, and advised the public to disregard divisive rhetoric propagated by agents of discord seeking to exploit the issue for political gain.
They encouraged northerners to actively participate in the upcoming public hearings on the tax bills, stressing that citizens should present their views constructively and engage lawmakers through established democratic channels, as advised by President Bola Tinubu.
The groups specifically called on the northern states to diversify their revenue sources to reduce dependence on federal allocations.
They said governors and leaders should prioritise agricultural development, leveraging the region’s potential in value chains, such as cotton and groundnuts, to boost productivity.
They also urged northern states to capitalise on federal government policies on solid minerals and livestock development to generate income, employment, and revenue.
They said the tax reform bills, if implemented effectively, could significantly enhance the country’s revenue base, reduce over-dependence on oil revenue, and ensure a more equitable tax system.
Participants, however, expressed regret that the discourse on the tax reform bills had been heavily politicised, regionalised, and ethnically charged.
ASUU: Tax Bills Will Ruin Public Universities
Academic Staff Union of Universities (ASUU) reiterated its stand against the proposed Nigeria Tax Bill 2024, saying it would spell doom for public universities in the country if implemented.
Addressing a press conference in Jos, the Bauchi zone of ASUU, comprising six universities, and led by Zonal Coordinator, Professor Namo Timothy, expressed the union’s concerns about the bill.
Timothy said the bill sought to replace the Development Levy, a major source of funding for Tertiary Education Trust Fund (TETFund) projects, with the Nigeria Education Loan Fund (NELFUND).
The move, ASUU argued, would have far-reaching implications for the survival of TETFund and the Nigerian tertiary education system.
The union stated that TETFund had been instrumental in infrastructure development, postgraduate training, research, and capacity-building in public tertiary institutions since 1993.
It wondered why the federal government would want to do away with the fund.
Timothy stated, “ASUU Bauchi Zone, made up Abubakar Tafawa Balewa University, Bauchi; Federal University, Kashere; Gombe State University, Gombe; Plateau State University, Bokkos; University of Jos, Jos; and Sa’adu Zungur University, Bauchi, has observed with concern, the on-going public debate on the review of the tax system in the country under a proposed presidential bill tagged, Nigeria Tax Bill, 2024, which is currently before the National Assembly.
“The bill seeks to enact a new law and to abrogate the Education Tax. The bill, if passed into law, will replace the Development Levy, a major source of funding of TETFund projects, so that all the funds generated from the Education Tax will be ceded to the newly established Nigeria Education Loan Fund (NELFUND).
“This is dangerous and unpatriotic. Section 59 (3) of the proposed Nigeria Tax Bill 2024 stipulates that only 50 per ent of total collection from the Development Levy will be accessed by TETFund in 2025 and 2026 while the remaining part will be shared by National Information Technology Development Agency (NITDA), Nigeria Agency for Science and Engineering Infrastructure (NASENI), and Nigeria Education Loan Fund (NELFUND).
“In 2027, 2028 and 2029, TETFund will receive 66.7 per cent of total collection, while in 2030 TETFund will receive zero allocation. The far-reaching implication of this toxic bill is that by 2030 all the funds generated from the Development Levy will be accessed solely by NELFUND.
“This portends danger for the survival of TETFund and, consequently, the Nigerian tertiary education system. It is noteworthy that TETFund has been the backbone of infrastructural development, postgraduate training, research and capacity-building in public tertiary institutions in Nigeria since 1993.”
The union leader called on the National Assembly to halt further debate on the bill and protect the sanctity of the TETFund Act 2011. He urged Nigerians to rise against anti-people policies of the Tinubu administration.
