ACF Urges National Assembly to Rethink Tax Reforms, Opposes VAT Increase
The Arewa Consultative Forum (ACF) has formally submitted a report to the National Assembly, offering its insights and recommendations on the proposed Tax Reform Bills.
Compiled by a special-purpose committee of experts, the report raises concerns about the broader impact of the reforms on all regions of Nigeria, not just the North.
In a statement issued by ACF’s National Publicity Secretary, Tukur Muhammad-Baba, the forum emphasized the need for a balanced approach to taxation.
“The proposed tax reforms have far-reaching implications for all sections of the country, not just the North,” the statement read.
The ACF strongly opposed an increase in the current 7.5% Value Added Tax (VAT) rate, citing economic hardships faced by Nigerians and businesses.
“We recognize that the government needs to increase revenue, but we also believe that the current VAT rate already places a significant burden on citizens and businesses,” the forum stated. “Increasing the rate further could have unintended consequences, such as reducing consumer spending and harming economic growth.”
As an alternative, the ACF suggested improving VAT collection efficiency, formalizing the informal sector and leveraging digital technologies to expand the tax base.
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Another major concern outlined in the report is the definition and distribution of “derivation.” The ACF called for a clear and transparent interpretation of the term to ensure equitable revenue sharing among states and local governments.
“The concept of derivation is critical to ensuring that states and local governments receive their fair share of revenue,” the ACF stated. “However, the current definition is ambiguous, and we believe it needs to be clarified to avoid disputes and ensure transparency.”
Additionally, the forum recommended a significant reduction in the powers of the Chief Executive Officer and Chairman of the Board of Directors/Governance of the Joint Revenue Board, advocating for stronger checks and balances.
The ACF’s intervention highlights growing concerns about the potential economic and governance implications of the proposed tax reforms, urging lawmakers to consider adjustments that promote fairness and economic stability.
