Former Senate Leader, Ali Ndume has described the pronouncement of the governors to give full support to tax reform bills as commendable.
The Nigeria Governors Forum at the end of their meeting with the Presidential Tax Reform Committee last week agreed to give support to the proposed legislation.
The governors in a communique signed by Kwara State Governor and Chairman of the Forum, Abdulrahman Abdulrasaq, “endorsed a revised Value Added Tax sharing formula to ensure equitable distribution of resources: 50% based on equality, 30% based on derivation, and 20% based on population.”
However, Ndume, the Senator representing Borno South, picked holes in the 30% to be set aside based on the principle of derivation.
According to the former Senate Chief Whip, 10 per cent should be enough to be shared based on derivation. He equally faulted the 4 per cent to be collected by the Federal Inland Revenue Service as administrative charges.
He said:” First of all, the move by the Governors is commendable.
The tax reform is long overdue. It is a good move. It’s is now left for the National Assembly to do the needful.
“For me, I still have issues with the 30 per cent derivation. That is on the high side. Even oil-producing states that bear the brunt of crude oil exploration in their communities take 13%.
“I also think 4 per cent as administrative charges for FIRS is too much. It shouldn’t be more than 1 per cent. That’s why they spend extravagantly.
“Secondly, the VAT itself should be reduced from 7.5% to 5% or even less. ”
