Ogun state governor, Prince Dapo Abiodun has said that most of the disquiet over the Federal Government-led proposed tax reform in the country is borne out of misunderstanding.
Abiodun spoke with the News Agency of Nigeria (NAN) on Thursday at the ongoing Africa Investment Forum, Market Days 2024, in Rabat, Morocco.
The organisers said that the theme underscored the commitment by partners to drive transformative investments across Africa through strategic collaborations.
Abiodun spoke after a closed-door meeting with the African Developmental Bank Group president, Dr Akinwunmi Adesina.
The governor said, from the perspective of the Ogun government, the resistance to the proposed tax reform was a product of gross misinformation and misinterpretation.
According to him, when people are better informed, they will have a much more positive appreciation of what the tax reform represents.
“The fact is that, from what we’ve done, subject to a few suggestions that we heard and what we’ve seen, the proposed tax reform will improve the lots of the states of the federation much better than the status quo.
“The misconception is that some of our people did not take time to interrogate and understand the reform. There was also a lot of suspicion around the intention.
“But we, in Ogun State, and I, as a responsible member of the Governors’ Forum as well as a patriotic Nigerian at that, I am convinced that the purpose of the reform is in the best interest of every subnational government in Nigeria.
“This I say without a shadow of a doubt,” the governor said.
Abiodun explained that, at the Governors’ Forum level, there was painstaking engagement going on and soon the cloud would be clearer as everyone would embrace the reality.
“We are speaking. I believe that as the days go by, people are becoming more appreciative of the true reflection of what the reform represents.
“I’m sure that by next week or so, you will more than likely see a better understanding from all stakeholders—that it is not what they thought it was. There are more benefits,” he added.
The governor noted that the tax reform is more of a benefit than the prevailing situation, as it is meant to be consumption-orientated.
He noted that the heart of the proposed tax reform was the Value Added Tax (VAT), a consumption tax.
His words: “The current situation puts us at a great disadvantage in Ogun because we’re the industrial capital of Nigeria, number one in non-oil revenue in Nigeria, and we have an abundance of almost every natural resource.
“So, you find out that a lot of production that goes on in Ogun State, but the companies themselves have their head offices somewhere else, like Lagos, the VAT accrues to Lagos.
“But with this reform and the new generation, that should improve. We feel that if you suggest better as to where values are added the most.
“For example, if a bag of cement is produced in Ogun State and the bag of cement is sold elsewhere, the question is, where is the most value-added? Is it at the point of sale, or is it where it’s mined, packed, bagged, and transported?”
He said those were the kinds of fine-tuning that the tax-free form required so that the benefits would be truly all-encompassing at the end of the day. (NAN)
