The League of Northern Democrats (LND) has advised that the Tax Reform Bills should align with constitutional provisions and respect religious and cultural practices, particularly inheritance taxation.
Chairman Bala Na’Allah said the four tax reform bills were “inelegantly crafted,” adding that they followed the South African model.
Na’Allah noted that the Tax Administration Bill intends to provide for uniform procedures for a consistent and efficient administration of tax laws in the country to facilitate tax compliance and optimise tax revenue collection.
He however stated that there is a lack of clarity on Section 77, and expressed concerns on the effectiveness and appropriateness of the corporate governance of state Inland Revenue Service as provided for by sections 82, 84, 87, and 90 of the Tax Administration Bill.
The group said the committee it set up on the tax reforms discovered that the October federal allocation showed a disproportionate application of the existing formula for the derivation portion of value-added tax (VAT) proceeds.
It said the distribution of the derivation allocation of the October 2024 VAT collection to the 774 local governments in the country showed that all the states belonged to a cluster apart from two, Rivers and Lagos. “This development is not unconnected with the interpretation of derivation by the tax authority.
These two states host most of the head offices of companies that remit VAT centrally,” he added.
According to him, in the South West with 137 local governments, Lagos State with only 20 local governments collected 88.2 percent of the zonal total, while the remaining 11.8 percent was shared by the 117 local governments in the other five states in the zone.
“While in the South-South, Rivers State collected 82.1 per cent and the remaining five states shared the balance of 17.9 per cent of the allocation to the zone.
“Looking at the share of each zone …the South West received the most (this was the sum of 31.27 billion) while the South East zone received the least (this was the sum of N903.28 million).
