Why Northern Governors opposed VAT bill – Governor Sule

Nasarawa State Governor Abdullahi Sule announced that all 19 governors of the Northern Governors Forum (NGF) oppose the proposed derivation-based Value Added Tax (VAT) model in the new tax bill under consideration in the National Assembly, calling it unfair to the northern region.

In an interview on Channels TV’s Politics Today, Governor Sule explained that the NGF, chaired by Gombe State Governor Inuwa Yahaya, reached a consensus during a meeting on Sunday, rejecting the derivation approach for VAT distribution. The NGF asserts that this model would disproportionately benefit states with higher VAT generation while placing northern states at a disadvantage.

Sule emphasized that the governors’ stance is not in opposition to President Bola Tinubu, noting, "We brought President Tinubu to power. The decision reflects unity across party lines, with representatives from the APC, PDP, and even apolitical figures, including traditional rulers, agreeing that a derivation model would create inequity."

He further illustrated the issue, explaining that most VAT revenue is generated in states with major ports or manufacturing hubs, such as Lagos. "Northern states currently contribute very little VAT due to limited industrial activity. Adopting a derivation-based system would leave these states with less federal revenue while benefiting states with higher VAT income."

Governor Sule’s comments underline the growing debate surrounding VAT reforms, as northern leaders advocate for a more equitable distribution model.