Governor Sule Backs Down on Tax Reforms, Seeks Fairness

By: Bayero Ade

Governor Abdullahi Sule of Nasarawa State has explained his decision to reverse his earlier stance on the controversial tax reforms bill, attributing the change to the resolution of his initial concerns about the proposal.

According to Politics Nigeria, In an interview on Channels TV’s Politics Today, Governor Sule clarified that his opposition was never against tax reforms in general but was focused on specific provisions within the original version of the bill. He emphasized the importance of thorough discussions before the bill’s passage.

“Our goal has been achieved, which is why I’m now expressing a different stance,” he said. “We wanted the bill to be carefully reviewed, not rushed through in its original form. Now that there is room for further scrutiny, I must commend the House of Representatives, especially the Speaker, for their handling of the matter.”

The governor expressed approval of the current approach by lawmakers, noting that it addressed the concerns raised by himself and others.

Governor Sule also commended President Bola Ahmed Tinubu’s broader tax reforms but reiterated that the main concern for northern governors was the removal of Value Added Tax (VAT) from the Federation Account Allocation Committee (FAAC).

“Let me be clear—we are not against the overall tax reforms. There are several positive aspects of the reforms being put forward by President Tinubu. However, our primary concern is the removal of VAT from FAAC allocations. If VAT is removed, 60 percent of the tax revenue would go toward derivation, which poses issues for states like ours,” he explained.

The governor further discussed the challenges of VAT collection, drawing from his experience as a former managing director in the corporate sector. He highlighted the complexities of tracking VAT when goods are ordered at one location but distributed across various states.

“For example, as MD of African Petroleum, I had a client in Maiduguri who would order 200 trucks of goods but later distribute most of them to other states. If VAT is charged at the point of consumption, it becomes difficult to accurately allocate it. Similarly, if VAT is based on derivation, corporate headquarters in Lagos would collect the taxes, putting other regions at a disadvantage. Either approach has significant challenges,” he said.

Governor Sule emphasized that his administration supports meaningful tax reforms but stressed the importance of ensuring fairness and transparency in their implementation.