Lagos State Governor Babajide Sanwo-Olu has dismissed claims that President Bola Tinubu’s Tax Reform Bill favours Lagos State over others. Sanwo-Olu urged Nigerians to understand the reforms, saying they will benefit everyone.
The Governor spoke on the sidelines of the Africa Investment Forum Market Days 2024 in Morocco on Thursday. He countered claims by Borno State Governor Babagana Zulum that the proposed Value-Added Tax (VAT) sharing model only benefits Lagos and Rivers states.
Zulum had expressed concerns that the bill would only benefit Lagos and Rivers, even though he claimed Sanwo-Olu had privately argued that Lagos would lose in the proposed VAT-sharing model. Zulum said he then told his Lagos colleague that was all the more reason to suspend the bill, as he didn’t want any state to lose, even Lagos.
Tax Reform Will Benefit All
However, Sanwo-Olu insisted that the bill would work for everyone’s benefit.
“What those uncomfortable with the tax reform are not willing to accept is that there is no way of making an omelette without breaking the egg,” Sanwo-Olu said. “You cannot make changes if the reforms are not set in. I have advised that people should read the reforms’ provisions very well and understand what they’re trying to do fully.”
The Governor advised Nigerians to look beyond individual states’ perceived benefits and losses. “I have seen comments that Lagos is going to be the major beneficiary. It is not true. Lagos is actually going to get less in some places, but on a larger scale basis, we see it as a global thing for a better governance structure,” Sanwo-Olu explained.
Sanwo-Olu stressed the urgent need for reform, citing Nigeria’s low tax-to-GDP ratio, which ranks among the lowest globally. He expressed optimism that the proposed reforms would unlock significant opportunities for all states and non-governmental actors.
The Lagos governor reassured Nigerians that the reforms are not intended to hurt anyone but to foster a fair and inclusive system that benefits everyone. “I have a positive attitude to it. I see it as a very wonderful reform. Tax-to-GDP ratio in Nigeria is one of the lowest in the world,” he said.
Senate Intervenes
The Nigerian Senate has set up a special committee to discuss the grey areas and resolve outstanding issues of concern. The committee will meet with the Attorney General of the Federation, Mr. Lateef Fagbami. The intention is to address the concerns of governors and other stakeholders, including the Nigerian Governors Forum (NGF) and the National Economic Council (NEC), which have recommended suspending the bill.
However, most northern leaders remain suspicious of the bill, demanding more time to scrutinize it. The fact that mostly southwestern leaders and economists are pushing for the bill has raised concerns in most other regions of the country about its potential impact on other regions.
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