Category: Northern Reports

The Independent Media and Policy Initiative (IMPI) has allayed the fears of Northern leaders over the tax reform bills before the National Assembly.

A former Commissioner for Information in Adamawa State and a senior official of IMPI, Dr. Ahmed Sajo said the fears of northern governments were based on the very wrong notion of a northern Nigeria that does not want to support productive activities.

Sajo, who spoke at a press conference in Abuja, urged leaders of the region to begin to think about adding value to the products that are produced in the north.

He said: “VAT is about value addition. The north must agree that, as northerners and as northern governors and northern governments, there’s the need to add value to the products we have, even if they are just agricultural.

“Take a cow, for instance. It has multiple value chains. If a northern state government can establish a world-class abattoir that slaughter about a thousand cows a day and processes it into meat; do a channel through which the blood is assembled. That would be a very huge gain. Imagine the blood of a thousand cattle. If you process it, it can be used for so many other things. The bones are valuable. The horns are valuable. The hooves and the skin are valuable.

“A few years ago, there were factories in Maiduguri and Kano that produced shoes, bags, belts, and others, using animal skin. If they could only learn to begin to add value to the products we have, they would not even worry about VAT, or any other tax for that matter, because the north is rich.

“Nasarawa state has just established a Lithium processing factory. Kaduna is doing the same. So, the leaders should begin to think about adding value to the products that we produce in the north. They should begin to think about productive engagement, not what is going on.

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“So, I don’t think there’s any need for us to begin to fear the tax reform bills that might alter VAT distribution patterns. It’s sad that some people keep saying the north is going to be cheated in the new tax system. But if you sit down and ask them to tell you the areas that the north will be cheated, they will not tell you.”

IMPI Chairman, Dr. Omoniyi Akinsiju said the group considered the actions of northern state governments as needless distraction away from the economically redeeming attributes of the tax bills.

He said: “These reforms, as coded in the bills, are built on three functional pillars of critical growth drivers which are revenue generation, enterprise development, and enhancement of citizens’ purchasing power.

“Indeed, this is the first time in the history of fiscal policy deployments in Nigeria that the fiscal authorities will combine these three attributions in the tax law. Before now, tax laws were primarily focused on revenue generation without any consideration for enterprise development and citizens’ economic enablement through facilitating aggregate demand.

“We are, however, not surprised by the furore generated over the proposed sharing formula for the proceeds of Value Added Tax (VAT) as contained in the bills, It is the typical expression of the hangover from the era of squabbling over who gets the lion’s share from revenue so generated when, indeed, all that is needed to be done is to innovate to create a symbiotic fiscal relationship between the state and the people in a win-win situation as captured in the bills.”