League of Northern Democrats (LND) under the leadership of former Kano State Governor, Senator Ibrahim Shekarau, has rejected the derivation formula proposed in the ongoing tax reform discussions
LND spokesman, Dr Ladan Salihu, said today this in a statement
It warned that it could deepen regional inequality if not clearly defined.
The league, however, commended the Nigeria Governors’ Forum (NGF) for endorsing a revised Value Added Tax (VAT) sharing formula of 50 per cent based on equality, 30 per cent on derivation, and 20 per cent on population.
The tax reform bills have generated heated debates across the country, with majority of the push backs coming from the North.
The League said it is convinced that tying derivation to the area of consumption will ensure that resources are distributed based on actual economic activity and contribution and that this approach not only aligns with the realities of modern taxation but also promotes accountability and incentivizes regions to develop their economic capacities.
