Tax Reforms: Oyedele replies Borno gov, says states will have more funds to pay salaries

Mr Oyedele said that besides the benefits of the tax reform bills for the states, the federal government will also share proceeds from the removal of fuel subsidies with state governments, which will enable them to have more funds in their coffers.

The chairperson of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said that the tax reform bills proposed by President Bola Tinubu will help state governments generate more revenue when implemented.

He said the concerns of Borno State Governor Babangana Zulum that the reforms will prevent some states from paying salaries are a false narrative because provisions of the bills will help states generate “more than enough to pay salaries.”

Mr Oyedele stated this while responding to questions at a town hall meeting on the Tax Reform Bills organised by Channels Television on Monday.

In an interview with the BBC Hausa Service, Mr Zulum said except Lagos State, the bills will not benefit other states. He also said they could have devastating consequences for the northern region.

But Mr Oyedele debunked the claim, saying that besides the benefits of the tax reform bills to the states, the federal government will also share proceeds from the removal of fuel subsidies with state governments, enabling the states to have more funds in their coffers.

“The comment by the governor of Borno State about them not being able to pay salaries if this is implemented…that is not supported by the proposals or the data that we have,” he said.

“We have to also remind ourselves that these same Nigerians and the ones who are paying commercial price now for fuel products – you know the fuel products we pay commercial price for today – is going to save the government about N10 trillion next year.

“This N10 trillion will be shared to states. They will share more than 60 per cent. By the way, you know the sharing formula. It will go to the states. How can’t they pay salaries with that?” he said.

The committee chairperson emphasised that the tax reforms will essentially generate more revenue for the states, contrary to the position of Mr Zulum, a professor.

“The same Nigerians are bearing the burden of having to pay fuel and commercial price, exchange rate floatation. You also want them to pay all manner of taxes. I do not think that is fair enough. We will have more than enough to pay salaries,” he added.

Mr Oyedele also addressed the fears of some critics on possible inflation if the tax reforms are implemented.

“By the way, the things that we pay VAT on, the top 10 – telecommunication, cement, beverages, fast food consumer products, sugar, professional services, entertainment, petrochemicals including lubricants, electronics, mobile phones and appliances and utility are consumed in all the states in Nigeria. So, I do not see where the fear is coming from.

“And there is an extra five per cent from the federal government to provide an offer. So, I will say that fear is not supported by the analysis we have and the available data,” he said.