A group led by former Kano State Governor, Senator Ibrahim Shekarau, has rejected the proposed tax sharing formula in Nigeria’s ongoing tax reforms.
The group warned that the lack of a clear definition of “derivation” could worsen regional inequality.
Speaking on Sunday, the group’s spokesperson, Dr. Ladan Salihu, emphasized that “derivation” should mean the place where goods or services are consumed.
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Without this clarity, the group argued, the proposed 30% derivation formula could unfairly benefit some regions, particularly Lagos State, while disadvantaging others, especially in the North.
The group acknowledged the Nigeria Governors’ Forum (NGF) for supporting a revised Value Added Tax (VAT) sharing formula (50% based on equality, 30% on derivation, and 20% on population).
However, they insist that reforms must ensure fairness by tying resource allocation to actual economic activity.
Until their concerns are addressed, the group stated they will not fully support the reforms.
They urged the NGF and the Presidential Tax Reform Committee to make necessary adjustments to ensure fairness for all Nigerians.