Borno Governor Babagana Zulum has expressed concerns over the consequences of President Tinubu’s proposed tax reform bills, particularly the VAT-sharing model. Zulum warns that the formula would benefit Lagos and Rivers while disadvantaging northern, south-east, and south-south states, calling for further consultation before implementation.
Babagana Zulum, the Governor of Borno, has voiced concerns over the potential consequences of President Bola Tinubu’s proposed tax reform bills, particularly regarding the value-added tax (VAT) sharing model. Speaking on Channels Television’s ‘Politics Today’, Zulum emphasized that while the president could push the bills through using his executive powers, there would be significant repercussions for millions of Nigerians.
Zulum pointed out that the new VAT distribution formula, which allocates 55% to states, 35% to local governments, and 10% to the federal government, would disproportionately benefit Lagos and Rivers states, leaving other regions, especially the northern, south-east, and south-south zones, at a disadvantage. This is because the model places greater emphasis on VAT derived from the states, with 60% of the funds being distributed based on derivation, a move that Zulum argues would disadvantage northern states, as they contribute less to the VAT pool compared to Lagos and Rivers.
The Governor clarified that the northern region's opposition to the bill was not a stance against Tinubu’s administration, as the region overwhelmingly supported his 2023 election campaign. However, he urged the federal government to delay the bills for further consultation to address concerns from various stakeholders, ensuring that the tax reforms do not harm the economic growth of northern, southeast, and south-south regions.