Lagos State Governor, Babajide Sanwo-Olu, has backed the federal government-led tax reform, describing the state’s position as “extremely comfortable.”
The governor made this known during an interview with the News Agency of Nigeria (NAN) on the sidelines of the Africa Investment Forum, Market Days 2024, in Rabat, Morocco.
Sanwo-Olu advised people to take time to read the provisions of the reform and fully understand what it aims to achieve. The governor debunked claims that Lagos would be the major beneficiary of the reform, stating that the state would actually lose in some areas but would have a bigger opportunity to play a more significant role.
The governor expressed his positive attitude towards the reform, describing it as “wonderful.” He noted that Nigeria’s tax-to-GDP ratio is one of the lowest in the world, emphasizing the need for change. Sanwo-Olu assured that the intention of the reform is not to hurt anyone but to better the lot of all Nigerians.
“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.
“I’ve seen comments around. Comments like Lagos is going to be the major beneficiary. It is not true. Lagos is actually going to be shaped off in some places, but on a larger scale basis, we see it as a global thing for a better governance structure.
“All of us will play better, and we’ll be able to discipline ourselves more. One of the things that you will see is that you need to work harder for you to get the full benefit of the reform. So it’s not just an easy kill,” he said.
The governor added that if the changes were not made, greater opportunities were inherent in the states of the federation as well as non-governmental actors.
According to him, Lagos State, indeed, will lose here and there, but will also have a bigger opportunity to have a bigger role to play.
“I have a positive attitude to it. I see it as a very wonderful reform.
“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, not only when you make those changes, you will not be able to see the opportunities that are found in your account.
“We really need to be bullish. We need to be encouraging ourselves and know that the intention is not to hurt anybody. This, I am very sure of.
“The intention is to better a lot, but not just better a lot of one person or one set of people. It’s for all of us, and so we should look at it this way,” he said.
The tax reform bills proposed by President Bola Tinubu have led to significant controversy, with some governors and traditional rulers of Northern Nigerian states rejecting the bill, citing that it does not align with the interests of the North and other sub-national entities.
Some of the key provisions of the bill include an increment in Value Added Tax (VAT) from 7.5 percent to 10 percent by 2025, a 27.5 percent company tax rate, a 4 percent development levy on companies, and a 5 percent excise tax on lottery and gaming income.