Nineteen governors from Nigeria’s northern states have voiced strong opposition to the Federal Government’s proposed Tax Reform Bill, particularly criticizing the shift to a Derivation-based Model for Value Added Tax (VAT) distribution. The governors, under the Northern States Governors’ Forum (NSGF), released a statement after a strategic meeting in Kaduna, expressing that the tax shift would disproportionately impact northern and less industrialized regions.
Gombe State Governor and NSGF Chairman, Muhammad Yahaya, read the communiqué which emphasized that VAT distribution based on derivation would disadvantage states lacking industrial bases. The meeting included northern traditional leaders, Chief of Defence Staff General Christopher Musa, and other key stakeholders.
The proposed change follows recommendations from the Taiwo Oyedele-led tax reform panel, which advocated a VAT distribution model reflecting local consumption rather than the location of company headquarters. Northern governors argue that this would reduce revenue allocation for their states, many of which ban alcohol sales under Sharia law but currently share VAT revenue from alcohol sales.
“The contents of the reforms are against the interests of the North and other less industrialized regions,” the NSGF statement read. “The forum unanimously rejects the proposed Tax Amendments and calls on the National Assembly to oppose any measures that could harm the well-being of our people.”
The NSGF emphasized its commitment to equitable national policies, urging that no region should be marginalized or short-changed. They also appealed to citizens to remain calm, assuring that both federal and state governments are working to implement policies to alleviate current economic challenges.
