FIRS In Trouble As Ndume Demands Revision Of Tax Reform Bills And Derivation Formula

FIRS In Trouble As Ndume Demands Revision Of Tax Reform Bills And Derivation Formula

Senator Ali Ndume, former Senate Leader, has voiced his concerns regarding the proposed tax reform bills, specifically criticizing the Federal Inland Revenue Service (FIRS) administrative…FIRS In Trouble As Ndume Demands Revision Of Tax Reform Bills And Derivation Formula

charges and the derivation formula for Value Added Tax (VAT) allocation.

The Nigeria Governors Forum (NGF), in a recent meeting with the Presidential Tax Reform Committee, expressed unanimous support for the tax reform legislation. As part of the reform, the governors approved a revised VAT sharing formula, which allocates 50% based on equality, 30% based on derivation, and 20% based on population.

While commending the governors for their support, Ndume, representing Borno South, expressed reservations about the proposed 30% derivation allocation. In an interview with Tribune Online, he argued that the percentage was too high and suggested a reduction to 10%.

Ndume also criticized the 4% administrative fee charged by the FIRS, calling it excessive and advocating for a reduction to 1%. He stated:

“The governors’ support for the tax reform is commendable. This reform is long overdue and is a step in the right direction. However, I have concerns about the 30% derivation allocation. Even oil-producing states, which are directly affected by crude oil exploration, receive only 13%. I also believe the 4% FIRS administrative charge is excessive. It should not exceed 1%. This is a major reason for their extravagant spending. Furthermore, VAT should be reduced from 7.5% to 5% or even lower.”

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