Revealed: State to bear the brunt of Tinubu’s tax reform bills

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has revealed that Lagos State is the most affected by the ongoing tax reform efforts.

Speaking during an interview on Arise TV, Oyedele addressed the concerns and criticisms surrounding President Bola Tinubu’s tax reform policy.

He explained that the committee’s proposals on Value Added Tax (VAT) were designed to benefit all regions of the country.

According to him, “Lagos is the biggest loser in the reform bill because most companies headquartered in the state currently remit their VAT there due to their centralised finance departments.

“Some states like Rivers State and Lagos State are in court saying that VAT should be collected by the state because they feel that they are not getting enough for the contribution they are making into the pot, and therefore if they collect it as a state tax, they will be better off.”

Oyedele noted that though Lagos and Rivers States have argued that direct VAT collection would better reflect their contributions, allowing them to collect it independently would create chaos for businesses.

“That is the equivalent of 100 per cent derivation. For us, as we’re working on these tax reforms. We said if we get states to start collecting VAT in Nigeria, it will be chaotic for business because we know for a fact that states in Nigeria will not respect input-output.

“However, under the reforms, VAT collection would be adjusted to address inequities, redistributing revenue away from Lagos despite its significant contributions”, he noted.

Oyedele said, “As of today, when companies remit their VAT, they do so from their head office because that’s where they have the finance department. So MTN, BUA, Dangote, Airtel, all the banks, most of them are headquartered in Lagos. Some of the oil companies are headquartered in Rivers State.

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