I have watched and read with keen interest, the brickbats over the fiscal reform bills, particularly the VAT bill as proposed. The Ndume masquerade market square dance on the senate floor on the matter leaves much for contemplations. Many have offered their opinions for and against the bill, given their interests and appreciation of the stakes as such may impact them like ‘ilu gangan’ the double-faced drum.
The concerns raised by many from the north, including a viral post by a certain ‘Aysha’ lady regarding the proposed VAT bill, may as well be genuine concerns for them as they see it, even if seemingly tainted with parochial interests. It is therefore important for us to look deeply into, and address the underlying narratives and assumptions that frame her arguments. Much as the call for a more equitable tax system is valid, the resistance to change must be critically studied in light of historical context and current realities. It would be in order to scrutinise the arguments against VAT bill and see where many of these ‘nay’ warriors like Aysha and our ‘Distinguished’ Ali Ndume may have gotten it wrong.
1. On the concerns on revenue shortfalls, where they argue that northern states will face significant revenue losses under a derivation-based VAT model, Aysha and her co-travellers clearly disregard the fundamental principle of consumption-based taxation. The VAT is designed to be levied where goods and services are consumed, which means that states with higher consumption should naturally benefit more. Northern states have an opportunity to boost their economic activities and consumption patterns as against depending solely on federal allocations. This dependency on federal funds is a rentier mindset that has historically stifled local initiative and development.
2. If we must go along with historical precedents, it goes without saying that the quota system established in education and other critical public sector engagements was a response to perceived (or can some be dubious claims) disadvantages faced by the North. Though this was intended to foster equity and create a seeming level playing field for the regions, it has also unwittingly created a culture of dependency rather than empowerment. It is rather unfortunate that this has led the north into a false sense of entitlement which has afflicted it and the nation until now. It is actually hypocritical for a region that has held significant leadership roles in Nigeria since our nationhood began, to continuously claim ‘disadvantage’ while fighting necessary reforms aimed at promoting self-sufficiency and economic independence. This over-pampered baby must be weaned of sipping kunnu from feeding bottles, and made learn to swallow its tuwo shinkafa with its choice soup with its own fingers.
3. There is this angle of cultural hypocrisy that needs to be sternly addressed if we must move forward as a people. The argument that northern states should benefit from VAT on goods they deem haram, like alcohol, while at the same time opposing the production and consumption of those goods is fundamentally flawed as a clear case of incongruity. If certain products are rejected and even destroyed on cultural or religious grounds, isn’t it inappropriate to demand a share of the revenue generated from them? This selective and discriminatory engagement with economic realities smacks of sheer hypocrisy, and undermines the call for genuine equity.
4. we all are aware, and agree that northern states face systemic challenges such as limited financial inclusion and poor infrastructure, yet we must take a stand that these issues should not be used as an excuse to reject reform. These issues should rather provoke proactive postures to improve socio-economic conditions in the region. The federal government’s role should be to support these subnational initiatives, as may be pursued, rather than perpetuate a system that seeks to indulge complacency.
5. Deploying the sentiments of security challenges as a clickbait for opposing fiscal governance reforms is a mischief taken far. The ongoing security issues in northern Nigeria truly pose critical challenges, but they cannot and should not be used as a blanket justification for resisting fiscal reforms. The north must have serious and razor-sharp discourse with itself about the community involvement and leadership complicity in the security deconstruction of the region. Resolving insecurity challenges requires a multimodal strategy, including community vigilance and cooperation, job creation and youth empowerment, which can be supported by increased revenue from a more effective VAT system. So, instead of seeing tax reforms as a regional threat, they should be seen as part of a broader strategy to alleviate poverty, stabilize national structures and grow the economy.
The proposed VAT reforms present a great opportunity for all regions to contribute to and benefit from Nigeria’s growth equally. The era of certain subnational or regional entities working for others to eat without making much attempt to contribute to the commonwealth must be consigned to the history bin. Instead of resisting change out of fear of losing federal allocations, northern states should focus on enhancing their local economies through increased consumption and investment. My two-pence for the northern leaders would be for them to shed the toga of the outmoded, predatory, feudal mindset that has hitherto kept their people in the grip of severe deprivations, and embrace the realities of contemporary governance and economic management models.
The summation of all things here is that while apprehensions about equity in tax distribution may be genuine, they do not hold valid ground as an excuse for fighting and rejecting necessary reforms. A truly impartial system requires all regions to adjust, adapt, innovate, and engage with the realities of our national economy. The way to go in building a thriving nation is to move beyond pushing and pursuing nauseating narratives of victimhood and dependency, and begin to chart a genuine path towards a future where every region contributes to, and shares equitably in Nigeria’s commonwealth.
©️Kenny Adenugba is a Communications and Strategy Consultant, Author and Public Affairs Analyst.
