Taiwo Oyedele, Chairman of the Presidential Tax Reform Committee, has voiced disappointment over the rejection of the tax reform bills by northern states, a reaction he said was unexpected.
Speaking during an interview on Arise News Morning Show on Wednesday, Oyedele admitted the federal government had anticipated opposition from Lagos and Rivers states, not northern states.
“We didn’t foresee this resistance from the northern states; we expected pushback primarily from Lagos and, perhaps, a bit from Rivers,” he remarked. “It feels like those we are advocating for are now opposing us.”
He highlighted the sensitivity surrounding VAT derivation, noting its distinction from oil and gas derivation, which is strictly tied to production.
“For VAT, every state consumes, so derivation isn’t limited to where production occurs. If shared based on VAT derivation, every state benefits,” Oyedele explained.
He further emphasized that the committee’s proposals align with constitutional provisions.
“Section 163 of the Constitution specifies that stamp duty should be shared based on derivation. Our proposal reflects this principle. It’s essential to recognize where taxes are generated to avoid scenarios where one state secures a Supreme Court judgment to address perceived inequities,” he concluded.