Governor Dapo Abiodun of Ogun State has linked the opposition to the Federal Government’s proposed tax reform to widespread misinformation and misconceptions.
Abiodun highlighted the reform’s potential to greatly improve the financial health of Nigerian states during his remarks on Thursday at the Africa Investment Forum Market Days 2024 in Rabat, Morocco. With the topic “Leveraging Innovative Partnerships for Scale,” the event showcases strategic partnerships that result in transformative investments throughout Africa.
The governor made these remarks after a closed-door meeting with Dr Akinwunmi Adesina, President of the African Development Bank Group. Abiodun stated that the proposed tax reform, if properly understood, would be more beneficial than the current system.
“From what we’ve observed and the feedback we’ve gathered, the reform is designed to improve the fortunes of states much better than the status quo,” he said. “The misconception arises from a lack of detailed interrogation of the reform and suspicion around its intent.”
Abiodun reassured stakeholders of ongoing discussions at the Governors’ Forum, aimed at clarifying the reform’s objectives. He expressed optimism that a clearer understanding would emerge in the coming weeks, leading to broader acceptance.
“By next week, I believe stakeholders will have a better appreciation of the reform’s true benefits,” the governor noted.
VAT Reform to Address Disparities
Central to the reform is the Value Added Tax (VAT), which Abiodun described as consumption-oriented and intended to address longstanding disparities in revenue allocation.
“The current system puts Ogun State, as Nigeria’s industrial hub and leading non-oil revenue generator, at a disadvantage,” he explained. “Production takes place in Ogun, but VAT often accrues to states like Lagos, where many companies have their head offices.”
Abiodun advocated for a fairer approach, where value-added processes, such as production and packaging, are given greater weight in determining revenue allocation.
He highlighted the importance of fine-tuning the reform to ensure it reflects the contributions of states like Ogun, which play critical roles in the production value chain.
Now on its second day, the Africa Investment Forum continues to draw leaders and interested parties that are dedicated to promoting partnerships and economic progress throughout the continent. The statements made by Governor Abiodun highlight the value of positive communication in resolving Nigeria’s financial issues and promoting fair development.
