Chief Sunny Onuesoke, a prominent member of the Peoples Democratic Party (PDP) and former governorship candidate in Delta State, has addressed the ongoing debate surrounding the Tax Reform Bills, specifically the proposal to overhaul the country’s Value Added Tax (VAT) distribution. He acknowledged concerns raised, particularly by northern leaders, who fear that the bill could exacerbate regional disparities. Onuesoke emphasized that while the proposed changes could be challenging for the northern states, the overall benefits would outweigh the disadvantages. He urged northern leaders to look beyond their reliance on monthly allocations and focus on tapping into their own resources.
A key aspect of the debate centers around Section 77 of the bill, which seeks to transition Nigeria’s VAT distribution model to one based on consumption rather than equality or population. This shift would prioritize states with higher consumption rates, like Lagos, which currently generates over 50% of the country’s VAT due to its status as an economic hub. Critics argue that this will leave the already struggling northern states at a disadvantage, potentially deepening the socioeconomic divide between Nigeria’s more prosperous south and the impoverished north. Figures like former Vice President Atiku Abubakar and Borno State Governor Babagana Zulum have raised concerns about the bill’s potential to worsen economic inequality.
Onuesoke, however, believes that the northern states have the potential to generate substantial revenue if they invest in their own resources, much like the southern states have done. He pointed out that every state in Nigeria is endowed with mineral resources that could be harnessed for economic growth. The tax reform, particularly Section 77, has the potential to boost Nigeria’s global competitiveness by addressing key economic challenges like low GDP, foreign exchange shortages, and unemployment. Onuesoke argued that all states, including those opposing the bill, should focus on innovation and income generation, rather than regional or ethnic sentiments, pointing out that other countries, particularly in the West, operate under similar consumption-based models.