Northern groups kick against tax reforms, oppose funding withdrawal from some agencies 

Northern groups under the Coalition of Northern Groups, CNG, Tuesday, kicked against the proposed tax reforms by the Tinubu-led administration. CNG made its stand known at a press conference held in Abuja, where the National Coordinator, CNG, Jamilu Charanchi, in an address on behalf of the group highlighted series of economic challenges facing Nigerians currently. Charanchi also said the policy will entrench hardship among the “already poverty-stricken Nigerians through the deployment of some harsh neoliberal measures.” He said after carefully reviewing the proposed tax reforms, they would aggravate existing challenges Nigerians are going through, and that only three States and the FCT might benefit from the current difficulties. He said “The CNG, like all Nigerians, is fully aware that Nigerians are facing socio-economic challenges, including poverty, unemployment, and underfunded education, poor health and dilapidated infrastructure. Others are Inflation, multiple taxation, corruption and impunity in Government which stifle our development. We believe successive governments have not done so, and this current administration tool is not doing enough to address these problems. “The CNG has carefully observed and monitored the ongoing conversation on the Tax Reform Bills proposed by President Bola Ahmed Tinubu’s administration.  
“The CNG, after carefully reviewing the proposed tax reforms, in their current form, believes that it would aggravate our existing challenges, perhaps with only three states and the FCT to benefit out of our collective difficulties. The proposed reforms in the Nigeria Tax Bill, particularly the introduction of a 60% derivation formula for revenue collection, are deeply contentious. The lack of publicly available data to justify these changes raises serious concerns, especially for consumption-heavy states in the North. Taxation is inherently a number-driven issue, yet the government has failed to provide the necessary data to justify this shift. For instance, how was it determined that Lagos and other headquarters-hosting states are disproportionately contributing to national VAT revenue and receiving a more disproportionate share? Was it not determined using data? Then if the claims that other states apart from Lagos and its likes will be better off under the proposed formula are based on transparent data, why isn’t it publicly available?
“Proponents of the reform claim it will improve fairness, but without clear projections showing how much each state will collect and receive under the proposed system compared to the current arrangement, this remains an unsubstantiated assertion. Increased VAT Rates: The planned incremental VAT hikes, culminating at 15% by 2030, pose significant risks to Nigeria’s economy, especially for vulnerable households whose poverty levels are alarmingly high. While the government has attempted to cushion the impact by exempting essential goods and services from VAT, the unregulated nature of Nigeria’s market system undermines these exemptions, making the overall economic strain inevitable. Defunding of the North East Development Commission (NEDC): As part of efforts to rebuild the North east region that has been destroyed by Boko Haram insurgency, 3% of VAT has been specifically devoted to NEDC for that purpose. Hence, the removal of VAT as a funding source for the NEDC endangers critical rehabilitation efforts in a region still recovering from decades of insurgency and instability.
“Based on the above analysis, the CNG categorically rejects these tax reforms in their current forms. They represent a shortsighted approach to revenue generation that sacrifices equity, inclusion, and sustainability. While we commend the courageous position of Northern Governors Forum (NGF), National Economic Council (NEC), the Northern council of traditional rulers and some members of the National Assembly who stood firm against this ill-fated policy to strangulate Nigerians, we equally urge other lawmakers to summon the courage and take bold decision against this unpopular policy.”  However, the group recommended retaining of funding for TETFUND, NITDA, and NASENI; Suspension of VAT Rate Increases; and reform VAT Derivation.