The Senate Leader, Opeyemi Bamidele, has revealed that the proposed tax reform bills before the National Assembly would significantly increase the Value-Added Tax (VAT) allocations for Kano and Zamfara states.
Speaking in his Christmas message, Mr. Bamidele, who represents Ekiti Central Senatorial District, stated that Kano’s VAT share is set to rise from the current 0.89% to 6.17%, while Zamfara’s allocation will increase from 0.05% to 1.21%.
Addressing Misconceptions
The senator dismissed criticisms of the bills, particularly those suggesting they disproportionately benefit certain states. He highlighted the significant reduction in VAT shares for Lagos and Rivers States under the proposed model:
- Lagos State: Currently receiving 80.26%, its share would drop to 15.28%, an 81% reduction.
- Rivers State: Its share would decrease from 7.74% to 4.6%, representing a 41% reduction.
“These figures prove that the criticisms against the new derivation model are entirely unfounded and based on false narratives,” Mr. Bamidele said.
Regional Concerns
The tax reforms have faced opposition, particularly from northern leaders. Borno State Governor, Babagana Zulum, expressed fears that the changes could harm northern states’ economies and their ability to pay salaries.
Mr. Bamidele acknowledged these concerns, assuring the public that the National Assembly is thoroughly reviewing the bills to ensure equitable benefits for all states.
“Our duty, as democrats, is to listen to our constituents and implement policies that positively impact their lives,” he said.
Tax Exemptions and Fairness
Contrary to critics’ claims, Mr. Bamidele noted that the bills also provide tax relief for low-income earners and start-ups:
- Employees earning less than ₦83,000 monthly (₦1,000,000 annually) would be exempt from paying VAT on consumption and essential services.
- Start-ups and technology-driven businesses would also enjoy exemptions.
- Essential goods and services would attract zero VAT.
“These provisions ensure justice and fairness in the distribution of VAT and provide relief for vulnerable groups,” Mr. Bamidele added.
Conclusion
The tax reform bills aim to create a more equitable system for allocating VAT revenues while addressing the needs of low-income earners and fostering economic growth. The National Assembly is committed to addressing public concerns and ensuring that the reforms benefit all regions of the country.
