Tax Bills: Kano, Zamfara to get increased VAT allocation

The Senate Leader, Opeyemi Bamidele, has said the tax reform bills currently before the National Assembly recommend an increase in the allocation of Value-Added Tax to Kano and Zamfara states.

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He said the provisions recommended 6.17 per cent to Kano compared to the current 0.89 per cent the state is receiving and that Zamfara will get 1.21 per cent of the total VAT allocation instead of the 0.05 per cent it currently receives.

Mr Bamidele, the Ekiti Central Senatorial District senator, gave the breakdown in his Christmas message to Nigerians.

The tax bills have faced criticism, especially from northern political and religious leaders. In a recent interview with the BBC Hausa Service, Borno State Governor, Babagana Zulum, said except Lagos State, the bills will not benefit other states of the Federation.

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He also said they could have devastating consequences for the northern region, especially preventing the states from paying salaries.

But Mr Bamidele debunked the claim, explaining that Lagos, which is currently receiving 80.26 per cent of the total VAT, will reduce to 15.28 per cent, and Rivers State, which currently receives 7.74 per cent, will decline to 4.6 per cent if the bills are passed.

The senator said that those criticising the tax reforms were only spreading false narratives, not what is contained in its provisions.

“As credible data have shown, for instance, the new model recommends 6.17 per cent to Kano compared to 0.89 per cent currently due to it. It recommends 1.21 per cent for Zamfara compared to 0.05 per cent.

“Currently, Lagos gets 80.26 per cent, but the new model only recommends 15.28 per cent, representing an 81 per cent decrease. Under the new model, Rivers’ share will decline from 7.74 per cent to 4.6 per cent, accounting for 41 per cent. With these figures, the narrative around the new derivation model is utterly incorrect and unfounded,” he said.

Mr Bamidele, however, noted that the National Assembly has taken note of all concerns raised on the bills.

“We have taken due note of public concerns about these initiatives. We are, as well, looking deeply into the areas of public concern. Our duty, as democrats, is not just to listen to our constituents, but also give effect to policy initiatives that will positively impact their lives,” he said.

Exemptions from paying taxes

Mr Bamidele also said that contrary to the claims of some critics, the tax reform bills also recommended that those earning N83,000 monthly or N1,000,000 annually should be exempted from paying VAT on consumption and essential services.

He argued that the bills promote justice and fairness in the distribution of VAT to all states.

“For the record, the tax reform bills, when finally enacted, utterly exempt all employees earning N1,000,000 annually or N83,000 monthly; exempt start-ups, shared services and technologically-driven services from taxation and recommend zero VAT on essential services and consumptions.

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“Even though it reviews the derivation formula to 60 per cent, this proposal is guided purely by the principles of equity, fairness and justice. The new model will eventually guarantee a significant increase in VAT distributable to every state of the federation,” the senator added.

What Christ taught us

Mr Bamidele said, in line with the teachings of Jesus Christ, the National Assembly will not deviate from the oath of allegiance they took in ensuring the interest and welfare of Nigerians in whatever decisions they will eventually make on the tax bills.

“Amid the debates about the tax reform bills, as Christ, our Lord has taught us and as the Parliament of the people, we shall never pursue any agenda outside our oath of allegiance or undertake policy initiatives adversarial to or conflicting the interest and welfare of all our constituents and indeed our Fatherland,” he said.

The senate leader wished Nigerians a merry Christmas celebration and a happy New Year in advance.

“With all my heart, I wish you all happy celebrations in this season of deep reflection. Merry Christmas and Happy New Year in advance,” he stated.