Lagos State Governor, Babajide Sanwo-Olu, has refuted claims that the state would disproportionately benefit from the proposed tax reforms, urging Nigerians to thoroughly examine the provisions of the reforms before drawing conclusions.
In an interview with the News Agency of Nigeria (NAN) on Wednesday, during the Africa Investment Forum Market Days 2024 in Morocco, Sanwo-Olu responded to concerns raised by Borno State Governor Babagana Zulum. Zulum had suggested on December 2 that the proposed value-added tax (VAT) sharing model would favor Lagos and Rivers states more than others.
Sanwo-Olu rejected this claim, stating that the reforms aim to create a fairer and more efficient tax system that benefits all states by addressing structural challenges in revenue generation and distribution. He emphasized that the aim of the reforms is to promote better governance across Nigeria, not to favor one region over another.
He explained, “What those uncomfortable with the tax reform are not willing to accept is that there is no way of making an omelette without breaking the egg. You cannot make changes if the reforms are not set in. I have advised that people should take time to read the provisions of the reform very well and to fully understand what they’re trying to do.”
Sanwo-Olu further clarified that while Lagos may face some losses in certain areas, the state would ultimately gain greater opportunities to play a more significant role in a restructured and more effective system.
The governor acknowledged the concerns around the reform but urged a deeper understanding of the long-term benefits for all states. He pointed out Nigeria’s alarmingly low tax-to-GDP ratio, one of the lowest globally, and expressed optimism that the reforms would unlock substantial opportunities for both state governments and non-governmental actors.
He said, “I have a positive attitude to it. I see it as a very wonderful reform. The tax-to-GDP ratio in Nigeria is one of the lowest in the world. So, there are a few things that need to happen, and like I keep saying, when you make those changes, you will not be able to see the opportunities that are found in your account.”
Sanwo-Olu also reassured Nigerians that the intention behind the tax reforms was not to harm any particular group but to create a fair and inclusive system that benefits everyone. He said, “The intention is to better the lot, but not just better the lot of one person or one set of people. It’s for all of us, and so we should look at it this way.”
As part of his efforts to clear up misconceptions, Sanwo-Olu revealed that he has been actively engaging with stakeholders and has urged the presidential tax reform committee, led by Taiwo Oyedele, to increase its public outreach efforts to ensure a clearer understanding of the reforms.
Acknowledging the resistance to the reforms, Sanwo-Olu pointed out that much of the pushback stems from misunderstandings. He remains confident that with increased public engagement, the reforms will be widely understood and appreciated for their potential to improve the country’s fiscal system and governance structure.
