TAX REFORM BILL: A PATH TO EQUITY AND UNITY
Taxation is not merely a tool for generating revenue; it is a cornerstone for fostering national balance and ensuring the collective survival of all citizens. Recognizing this, Nigeria has, with wisdom, exempted many essential goods and services such as agricultural produce, fertilizers, certain baby products, and healthcare items from taxation or VAT. This policy ensures that food items like rice, maize, sorghum, millet, beans, and meat—produced in states like Kano, Borno, and Adamawa, Taraba, etc., can reach markets in Enugu, Lagos, and Port Harcourt, where they are accessible to Nigerians at reasonable prices.
Conversely, products such as fertilizers, agricultural machinery, baby items, and healthcare essentials manufactured in industrial hubs like Aba, Ibadan, Warri, and Lagos, etc., remain affordable across the country, including the northern states, because they are VAT-exempt. This interconnected economic framework fosters interdependence among states and promotes equitable access to essential goods, irrespective of geographic location.
However, the current discourse surrounding the proposed tax reform bill, particularly its provisions on VAT, has raised concerns about fairness and equity. Rather than serving as a unifying mechanism, the proposed VAT contributions and their sharing formula have become a source of tension, with some Nigerians—especially from the North—perceiving the system as skewed in favor of economically dominant states like Lagos. This perception has fueled suspicions, leading to terms like “Lagos colonialism” being used to describe the perceived imbalance in resource allocation and benefit distribution in the new VAT bill if passed into law by two chambers of the National Assembly.
To address these concerns, the tax reform bill must be designed not only to generate revenue but also to reflect the principles of fairness, inclusivity and Nigeria’s complex politics.
Taxation policies should be a tool for strengthening national unity, ensuring that every Nigerian, regardless of region or state, feels an equitable share of the nation’s prosperity. There is no need to rush to nowhere- the government must patiently engage in transparent dialogue and adopt a balanced approach that considers the diverse economic contributions and needs of all states.
One of key reasons for the rejection of the bills by the north is largely because President Tinubu’s administration is facing growing suspicion among many Northerners due to certain policies, programs, and appointments. This is a troubling development for a government that, prior to coming to power, proudly counted the North as its political stronghold and key support base.
Such distrust is damaging, not only for the administration’s credibility but also for national unity. To maintain the confidence of all Nigerians, it is crucial for the government to address these concerns transparently, ensuring that its actions reflect inclusivity and fairness. Economics and politics often intertwine. When political backlash outweighs economic benefits, retreat and consultation are essential.
The Tinubu government must strive to deliver on its promises while fostering trust across all states and demographics, particularly among those who placed their faith in its leadership.
In essence, taxation should not be seen as a divisive tool but as a bridge that connects the unique strengths of each state and region, fostering a truly united and prosperous Nigeria.
Zayyad I. Muhammad, Abuja
