Governor Abdullahi Sule of Nasarawa State has clarified his decision to reverse his earlier position on the controversial tax reforms bill, attributing it to the resolution of his initial concerns about the proposal.
Speaking during an appearance on Channels TV’s Politics Today, Governor Sule explained that his initial opposition was not against tax reforms in principle but rather targeted at specific provisions in the bill’s original form.
He highlighted the need for comprehensive discussions before the bill’s passage.
“We have achieved our goal, and that is why my stance has changed,” he said. “Our aim was to ensure the bill was reviewed and not rushed in its original form. Now that opportunities for further scrutiny have been created, I must commend the House of Representatives, especially the speaker, for their handling of the matter.”
The governor expressed satisfaction with the lawmakers’ approach, noting that their actions addressed the concerns raised by him and others.
While commending President Bola Ahmed Tinubu’s broader tax reforms, Governor Sule reiterated that northern governors were primarily concerned about the removal of Value Added Tax (VAT) from the federation allocation.
“Let me make it categorically clear—we are not against the tax reforms. There are many good aspects to the reforms being introduced by Mr. President. However, our concern was specifically about removing VAT from FAAC allocations. If you take VAT out of FAAC, 60 percent of it would go to derivation, which raises significant issues for states like ours,” he explained.
Governor Sule further elaborated on the complexities of VAT collection at points of derivation and consumption, using his experience as a former managing director of major corporations to illustrate the challenges.
“For example, as MD of African Petroleum, I had a customer from Maiduguri who would order 200 trucks of goods but later distribute most of them across other states. If VAT is charged at the point of consumption, accurately tracking and allocating it becomes complicated. Similarly, if VAT is based on derivation, corporate headquarters in Lagos would collect the taxes, leaving other regions at a disadvantage. Either way, the system is fraught with difficulties,” he stated.
Governor Sule emphasized that his administration supports meaningful tax reforms but called for careful implementation to ensure equity and transparency across all states.