The Chairman of the Presidential Tax Reform Committee, Taiwo Oyedele, has expressed his disappointment over the rejection of the tax reform bills by northern states.
During an appearance on Arise News Morning Show on Wednesday, he noted that the federal government did not anticipate this pushback from the northern states, as they believed the resistance would come from Lagos and Rivers states instead.
“We had not envisage that this was going to be pushback from the other states; we thought the pushback would come Lagos mostly maybe a little from Rivers.
“It almost like we ended up with the people we are fighting for are we now fighting us”, he said.
Oyedele pointed out that VAT derivation is a sensitive issue for states because it differs from oil and gas derivation, which is based on production.
He explained, “VAT derivation I think that word is sensitive because people think about where it’s based on production. If they’re not producing crude oil, you don’t get any part of that derivation.
“Whereas for VAT, every state consumes. If you share anything based on VAT derivation, everyone gets something from it.”
He also stressed that the government’s proposal aligns with the constitution.
“The Constitution with respect to stamp duty it actually says under Section 163 says stamp duty should be shared based on derivation.
“So what we are proposing is not strange to our constitution, when it comes to matters of tax generation we must recognise where they’re being generated otherwise we end up in a situation where one state will get a supreme court judgement”, he added.