Understanding Why Northern Governors Oppose the VAT Bill: Insights from Governor Sule

Northern Governors’ Stance on the VAT Bill Explained by Governor Sule

Northern governors, led by Governor Abdullahi Sule of Nasarawa State, have expressed their opposition to the proposed Value Added Tax (VAT) bill currently being debated in the National Assembly.

Their main concern is that the new derivation-based distribution model for VAT would be inequitable, particularly disadvantaging northern states, which currently generate less VAT revenue compared to their southern counterparts.

Sule clarified that their stance is not a rejection of President Bola Ahmed Tinubu’s administration but rather a response to the potential financial implications of the proposed changes.

He explained that since companies pay VAT based on their headquarters’ location rather than where goods or services are consumed, the northern states could end up receiving a smaller share of VAT revenue.

This could lead to a financial imbalance, as most VAT-generating activities are concentrated in the southern states​.​

The Northern Governors Forum has made it clear that they stand united on this issue, emphasizing that they are not opposing the president or his initiatives but are advocating for a fairer distribution model for VAT that takes into account the economic realities of all regions.