Taiwo Oyedele, the chairman of the Presidential Tax Reform Committee, has voiced his displeasure at the northern states’ rejection of the tax reform legislation.
“The federal government did not expect this pushback from the northern states, as they thought the resistance would come from Lagos and Rivers states instead,” he said during an appearance on the Arise News Morning Show on Wednesday.
“We had not envisage that this was going to be pushback from the other states; we thought the pushback would come Lagos mostly maybe a little from Rivers.
“It almost like we ended up with the people we are fighting for are we now fighting us”, he said.
Oyedele noted that because VAT derivation is different from production-based derivation for oil and gas, it is a delicate topic for states.
He explained, “VAT derivation I think that word is sensitive because people think about where it’s based on production. If they’re not producing crude oil, you don’t get any part of that derivation.
“Whereas for VAT, every state consumes. If you share anything based on VAT derivation, everyone gets something from it.”
Additionally, he emphasized that the government’s plan is constitutional.
“The Constitution with respect to stamp duty it actually says under Section 163 says stamp duty should be shared based on derivation.
“So what we are proposing is not strange to our constitution, when it comes to matters of tax generation we must recognise where they’re being generated otherwise we end up in a situation where one state will get a supreme court judgement”, he added.
