As Nigeria considers a significant shift in its tax structure, Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service (FIRS), has outlined a vision for a more prosperous, fair, and unified nation through the proposed Tax Reform Bill. The reform, which has raised some concerns in the Northern region, introduces a derivation-based model for Value Added Tax (VAT) distribution that promises to directly benefit local communities.
In his statement, Dr. Adedeji reassured stakeholders that the bill does not impose additional taxes or increase burdens on citizens. “This reform is about taxing prosperity, not poverty,” he emphasized, explaining that it targets higher earners and corporations while aiming to reduce redundant taxes that affect small businesses and local communities. By simplifying the tax process, this model seeks to make compliance easier for small traders, farmers, and businesses, fostering growth and economic efficiency.
Under the proposed derivation-based model, VAT generated from goods and services within a region will be redirected back into that community, a move expected to invigorate Northern Nigeria’s infrastructure. Funds collected locally would support critical projects, including roads, schools, and hospitals, creating a ripple effect that boosts local businesses, attracts new industries, and fosters sustainable development in the North. This localized approach would also encourage states to leverage their unique strengths, fostering creativity and independence in their economic development.
Dr. Adedeji noted that the reform aligns with President Bola Tinubu’s Renewed Hope Agenda, which aims to empower every Nigerian region through transparency, accountability, and growth. “This is about a fairer, simpler tax system that not only empowers businesses but also respects and values taxpayers’ contributions,” he stated, underscoring the government’s commitment to building public trust through transparent tax administration.
As Nigeria moves forward with the Tax Reform Bill, Dr. Adedeji calls on Northern leaders to consider the long-term potential of this transformation. “Together, with your guidance and influence, we can pave the way for a Nigeria where all regions feel seen, valued, and fairly treated,” he concluded, urging regional leaders to support reforms that can contribute to a stronger North and a unified, prosperous Nigeria.
