By Umar Farouk Bala
In simply two brisk days—Wednesday, Might 7, and Thursday, Might 8, 2025—the Nigerian Senate handed the 2024 Tax Reform Payments, appearing swiftly on the chief’s request. However in that velocity, one thing important might have been sacrificed: regional fairness.
There is no such thing as a denying Nigeria’s tax system wants a reset. It’s inefficient, outdated, and unable to help a contemporary financial system. However this newest reform effort, packaged in urgency and sealed with Senate approval, is stirring silent anguish—particularly in Northern Nigeria.
Central to the disquiet is the proposed Worth Added Tax (VAT) distribution system. Many Northern voices have labeled it “anti-North”—and never with out trigger. This isn’t mere politicking. It’s a real alarm over financial survival.
By centralizing tax administration beneath a brand new Nigeria Income Service, the Federal Authorities goals to streamline assortment. However in doing so, it dangers stripping Northern states—lots of that are nonetheless constructing their fiscal independence—of much-needed autonomy.
These are states already lagging in internally generated income, industrial growth, and infrastructural capability. Now, they’re being requested to run a race with areas that started miles forward.
The brand new system hyperlinks income allocation extra intently to consumption and productiveness—benchmarks that naturally tilt in favor of the extra commercialized South. States like Lagos and Rivers, financial giants in their very own proper, stand to achieve.
In the meantime, Northern states—agrarian, casual, and structurally underdeveloped—watch the margin widen. However the implications go deeper. The North’s financial system runs on small-scale merchants, roadside artisans, casual markets, and seasonal farmers.
These are folks already on the margins—usually with out financial institution accounts, with out web entry, with out formal data. But they may now be required to fulfill trendy tax obligations that even small companies in Abuja and Port Harcourt battle to navigate.
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Although the reform payments declare to guard low-income earners, the elevated compliance mechanisms, digital necessities, and regulatory oversight might do the other. They might push extra Northern residents out of the formal financial system and into deeper poverty.
Sure, the argument has been made that population-heavy Northern states unfairly profit beneath the present mannequin. However even when that declare holds water, the reply can’t be an abrupt pivot to a system that ignores deeply rooted structural disparities.
Reform should be sequenced. Improvement should precede extraction. The horse should not observe the cart. The missed actuality is that many Northern states stay closely depending on federal allocations for survival.
Transitioning to a tax-heavy mannequin with out first strengthening native establishments, investing in infrastructure, and equipping residents with the instruments for compliance is a recipe for financial trauma. Worse nonetheless, the reforms ignore a rising most cancers within the system—casual, unlawful taxation by non-state actors.
From roadside unions to native touts, these shadow tax networks, particularly frequent within the North’s chaotic transport sector, are unregulated and untamed. Ignoring them on this reform is akin to patching a leaking roof whereas leaving the doorways broad open.
Maybe most troubling is the method itself. The payments have been crafted and handed with little or no session from key Northern stakeholders. A reform of this magnitude needs to be constructed on dialogue, not decree.
When coverage feels imposed—particularly beneath a Southern-led presidency—it feeds notion of bias, deepens regional mistrust, and palms political opportunists a harmful narrative to take advantage of. We can not afford that. Not now.
Not as 2027 attracts nearer, and divisive rhetoric lurks in marketing campaign shadows. Certainly, Nigeria wants tax reform. However reform that divides won’t ship growth. Reform that marginalizes can not construct a united nation.
What the nation wants is a daring however balanced method—one which carries everybody alongside, one which listens earlier than it legislates. The North will not be asking for particular therapy. It’s asking for equity. For reform that’s simply.
For a course of that acknowledges {that a} farmer in Zamfara and a banker in Victoria Island don’t stand on equal floor. Until these fault strains are acknowledged and addressed with sincerity, the 2024 Tax Reform Payments might not repair the issue—they could merely deepen it.
