President Bola Tinubu’s proposed tax reform bill has ignited a heated debate across Nigeria, deepening the economic and political divide between the nation’s northern and southern regions. The bill, aimed at streamlining tax codes and increasing revenue, includes provisions to allocate more Value Added Tax (VAT) revenue to states that generate higher income.
Critics from northern Nigeria argue that this approach disproportionately benefits the more economically productive southern states, such as Lagos and Rivers, while marginalizing the resource-strapped northern regions. Many northern states rely heavily on federal allocations due to their lower levels of industrialization and economic output.
This perceived inequity has sparked resistance from northern lawmakers, who have delayed the progress of the bill in the National Assembly, citing concerns about exacerbating existing economic disparities. They have called for further dialogue to ensure that the reform is more equitable and considers the developmental challenges faced by northern states.
Proponents of the reform, however, argue that incentivizing states to boost their revenue generation aligns with President Tinubu’s vision of fiscal federalism and economic self-reliance. They believe this shift could encourage all states to invest in infrastructure, education, and other sectors to stimulate local economies.
As the debate continues, the bill has highlighted long-standing tensions between the predominantly Muslim north and the predominantly Christian south, bringing issues of equity, governance, and national unity to the forefront. The outcome of this legislative impasse could shape Nigeria’s economic landscape and test the resilience of its federal structure.
