Lagos State Governor Babajide Sanwo-Olu has dismissed allegations that Lagos will be the primary beneficiary of Nigeria’s proposed tax reform bills.
Speaking at the Africa Investment Forum Market Days 2024 in Morocco on Wednesday, Sanwo-Olu urged Nigerians to take time to understand the reforms before drawing conclusions.
The debate stems from comments made by Borno State Governor Babagana Zulum, who on December 2 argued that the proposed value-added tax (VAT) sharing model would disproportionately favour Lagos and Rivers States.
Addressing the claim, Sanwo-Olu countered that the assertion is incorrect, emphasizing that the reforms would demand collective effort from all states.
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“I have seen comments, such as Lagos being the major beneficiary. It is not true. Lagos is actually going to be shaped-off in some places.
However, on a broader scale, the reforms will benefit all stakeholders and lead to better governance,” he said.
Sanwo-Olu explained that the tax reforms are designed to promote fiscal discipline and encourage states to work harder to optimize their revenue streams. “This is not an easy kill. You need to work harder to get the full benefit of the reform,” he said.
The governor highlighted Nigeria’s low tax-to-GDP ratio—among the lowest globally—as a primary driver for the reforms, which aim to create a fairer and more inclusive tax system.
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“Tax-to-GDP ratio in Nigeria is one of the lowest in the world. These reforms are not intended to hurt anyone but to foster a fair and inclusive system for all,” he added.
While acknowledging that Lagos might experience some financial losses under the new model, Sanwo-Olu expressed optimism that the state would gain opportunities to play a pivotal role in national development.
Sanwo-Olu attributed resistance to the reforms to misunderstandings and encouraged stakeholders to study the provisions.
He urged the Presidential Tax Reform Committee, led by Taiwo Oyedele, to enhance public education on the bills to clarify misconceptions.
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“Some of the resistance stems from misconceptions, but public engagement is a positive step forward. I encourage everyone to read the provisions carefully and understand the intent behind the reforms,” he stated.
President Bola Tinubu introduced four tax reform bills on October 3, including the Nigeria Tax Bill and the Joint Revenue Board Establishment Bill, urging the National Assembly to pass them.
However, the Northern States Governors Forum (NSGF) has opposed the reforms, arguing they could disproportionately impact northern states.
Sanwo-Olu reassured Nigerians that the reforms aim to create a balanced and equitable system for all regions. “The intention is not to hurt anybody. It’s for all of us, and we should approach it with optimism,” he concluded.