The new tax reform bill proposed by President Bola Tinubu to the National Assembly has ignited a widespread and spirited debate across the nation, with opinions varying significantly by geographical regions.
In the North, however, a distinct set of concerns have emerged, highlighting growing apprehensions about how the legislation may disproportionately affect the economic stability and cultural identity of Northern Nigeria.
As residents navigate the implications of the proposed changes, it becomes clear that the discussion surrounding the bill is both complex and multifaceted.
President Tinubu seems not ready to beat retreat in his achieve the economic agenda despite predictions that the bill could cost him his re-election bid in 2024 Presidential poll.
Recent interviews and indepth conversations with individuals from various northern Communities reveal a mix of skepticism, frustration, and cautious optimism.
Most residents, especially those employed in industries critical to sustaining the northern economy, worry that the bill favours urban centres and wealthier regions, effectively putting northern Communities at a disadvantage.
TheNewspad investigation indicates that this concern reflects a broader trend where residents feel their voices and needs are often overshadowed by those from more affluent parts of the Country.
Tax reform typically aims to improve the efficiency of tax administration and maximize the economic and social benefits derived from the tax system.
The proposed changes to corporate tax structures and deductions have drawn sharp criticisms from small business owners throughout the North.
Most of these business owners contend that the new measures will significantly strain industries such as manufacturing, agriculture, and mining—sectors that are not only economically vital but also deeply intertwined with the region’s identity and heritage.
Experts warn that the proposed tax reform bill in Nigeria could cripple the economy in northern States.
The controversy primarily revolves around Section 77, which modifies how Value Added Tax (VAT) is redistributed to States, shifting from an equality or population-based model to a consumption-based one that emphasizes derivation.
This change could lead to northern States losing up to 30-40% of their current allocations, severely impacting states like Sokoto, Gombe, and Zamfara, which rely heavily on federal allocations.
Engr. Bashir Ishaq Bashir, a UK-trained Mechanical Engineer, points out that Lagos will consolidate its financial dominance, while northern Nigeria risks losing vital resources.
The centralization of tax collection may also affect States with diverse local taxes, such as Kano and Kaduna, resulting in a loss of fiscal autonomy and revenue.
Experts argue that changes to the VAT distribution system will benefit States like Lagos, Rivers, and Ogun while leaving others significantly disadvantaged. This could exacerbate the economic divide between the north and south, further entrenching poverty and underdevelopment.
But, Ismaila Umar Lere, a public affairs analyst, expressed his concerns clearly. According to him, “The complexities of implementing such sweeping reforms during a time of economic uncertainty further exacerbate the risks”.
To ensure that tax reform serves as a tool for national strength rather than division, Nigeria must carefully consider the implications of these reforms and prioritize inclusive dialogue, comprehensive Stakeholders engagement, and equitable solutions that reflect Nigeria’s diverse experiences.
His remarks echo the sentiment shared by many analysts, namely that the bill may further entrench existing inequalities rather than provide the necessary support for struggling sectors. This sentiment was echoed by several small entrepreneurs who fear that changes in property tax deductions would impose an additional burden on already struggling local businesses.
These entrepreneurs worry that without targeted government support in this ongoing debate, their ventures could face severe challenges, jeopardizing their livelihoods and the job security of local workers.
The middle-class population—long regarded as the backbone of northern society—has expressed significant unease over the proposed reforms targeting personal tax brackets.
For many families in the region, these reforms feel like a direct threat to their financial well-being.
This demographic plays a crucial role in sustaining the local economy, and any perceived increase in their tax burden raises alarms about the potential for greater economic strain.
Mujahid Musapha, a small business owner, shared his thoughts on the issue. “I’ve always paid my fair share of taxes, but now it feels like the burden is shifting even more to the middle class.
“We’ll be left footing the bill while larger corporations receive more breaks.”
His comment highlights a growing sentiment among the middle class that they are shouldering an unfair burden compared to wealthier entities, which often have more resources to navigate complex tax obligations.
Despite the criticism directed toward the new tax reform bill, it is important to note that not all Northerners are uniformly opposed to the reform.
Some individuals see potential advantages in the bill, particularly its ability to attract investment and stimulate economic growth, though these views are not widely shared.
The National Assembly has suspended debate on the new tax bill, to pave the way for further consultation ostensibly to douse the preempted hysteria it’s generating.
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