How di new Vat sharing formula govnors propose go affect Nigerians
Wia dis foto come from, @kadirsgovng/X
Di Nigerian govnors don endorse di tax reform bills wey President Bola Tinubu send go National Assembly, but dem dey propose new sharing formula for Value-Added Tax (Vat).
Dem make dis decision during di meeting of di Nigeria Governors' Forum and di Presidential Tax Reform Committee wey hold for Abuja on Thursday 16 January.
For one communique wey di chairman of di forum and govnor of Kwara State AbdulRahman AbdulRazaq share afta di meeting.
Nigerian govnors say dem support di "comprehensive reform of Nigeria old tax laws".
"Members acknowledged di importance of modernising di tax system to enhance fiscal stability and align with global best practices," di govnors tok.
New Vat sharing formula
Di govnors propose a revised Vat-sharing formula wey dem tok say go ensure equitable distribution of resources.
Dem say di new formula go be 50% based on equality, 30% based on derivation, and 20% based on population.
"Members agree say make increase no dey for di Vat rate or reduction in Corporate Income Tax (CIT) at dis time, to maintain economic stability," di govnors tok.
"Di Forum advocate for di continued exemption of essential goods and agricultural produce from VAT to safeguard di welfare of citizens and promote agricultural productivity."
Di NGF also recommend say make terminal clause no dey in di sharing of development levies in di bills for di following:
- Tertiary Education Trust Fund (TetFund)
- National Agency for Science and Engineering Infrastructure (Naseni)
- National Information Technology Development Agency (NITDA)
Di govnors say dem support di "continuation of di legislative process for di National Assembly wey go result in di passage of di tax reform bills.
Wetin be di implication?
Dr. Abdulsalam Kani, wey be economic expert, tell BBC News Pidgin say even though di govnors try for di mata, dem make mistake as dem decide how much each state go collect.
E tok say no be dia work, na Federal Inland Revenue Service (FIRS) get di responsibility.
"Bifor, dem dey share 30% of di tax based on di population of di states, but now dem don propose am to 20%," e explain.
"Dis one go affect di areas wey get plenty pipo, and e no make sense," Dr. Kani add.
E still tok say na only FIRS get di power to decide how dem go share di tax.
"By law, na FIRS suppose decide how much money go reach each state."
"Even di 30% wey dem gree, e no favour northern Nigeria. Di same tin wit di 20% for population" e tok.
Dr. Kani suggest say make di lawmakers leave di population share for 30% di way e dey bifor.
"Lawmakers suppose make sure say dem no just collect tax based on wia dem dey produce di goods but also wia pipo dey buy and dey use am."
E warn say dis kain arrangement fit bring inflation, wey go cause poverty and job wahala.
"If dem gree for dis law, e fit slow down business sake of say many tins go cost.
"Wen price high, pipo no go buy, and production go reduce.
"Dis one go lead to sack for workers or job wahala, and e go make di insecurity mata worse," Dr. Kani tok.
Dr. Kani say e hope lawmakers go do wetin go benefit majority of Nigerians, not just small group of pipo.
'E fit cos poverty and job wahala'
Dr Kani suggest say make di lawmakers leave di population share for 30% di way e dey before.
"Lawmakers suppose make sure say dem no just collect tax based on wia dem produce di goods but also wia pipo dey buy and dey use am."
E warn say dis kind arrangement fit bring inflation, wey go cause poverty and job wahala.
"If dem gree for dis law, e fit slow down business sake of many tins go cost," e add.
"Wen price high, pipo no go buy, and production go reduce," e explain.
"Dis one go lead to sack for workers or job wahala, and e go make di insecurity mata worse," e tok.
Dr. Kani say e hope lawmakers go do wetin go benefit majority of Nigerians, not just small group of pipo.
Wetin e mean for Nigerians
On top dis mata, Habibu Yahaya, wey be economic expert for Kano, tok say di policy fit put more money for di hand of low-income pipo and increase buy and sell, wey go help di economy.
"Dis law go reduce tax for low income earners, and e go give dem more money to do business, wey go help grow industries," Yahaya tok.
"If pipo no fit buy tins becos money no dey, di economy go suffer," e explain.
Yahaya add say, "But if pipo get money, dem fit dey buy and sell well-well, and tax no go stop di buy and sell process."
E conclude say if dem fit solve di wahala for di sharing system, e go help improve di economy.
