Recently, northern Nigerian governors raised concerns over a new tax reform bill sent to the National Assembly by President Bola Tinubu’s administration. The governors, led by Muhammadu Inuwa, Gombe State Governor and Chairman of the Northern Governors’ Forum, released a statement on Monday rejecting specific changes proposed in the bill.

The tax reform bill, submitted on October 3, 2024, seeks to rename the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service (NRS) and suggests changes in how value-added tax (VAT) is distributed. A significant part of the proposed reform focuses on using a derivation-based model for VAT distribution, which means tax revenue would be allocated based on where goods and services are produced rather than where they are used.

Northern governors argue that this approach could disadvantage their region since VAT is often remitted at the company’s headquarters location rather than where the sales occur. Many companies, especially large ones, are headquartered in other parts of Nigeria, meaning that revenue from VAT might not accurately reflect economic activity within the northern states.

The governors are calling on the National Assembly to oppose this bill, voicing that policies must consider the regional economic impacts to ensure fairness. They emphasize that while they support initiatives for national growth, they want policies that fairly represent all parts of the country.

They also encouraged Nigerians to stay calm amid the current economic challenges, affirming their dedication to policies that support nationwide development without leaving any region behind.