Sources Reveal How Governors’ Endorsement of Tax Bills Prevented Tinubu-Shettima Fallout

The endorsement of the tax reform bills brought before the National Assembly by President Bola Tinubu by the 36 state governors is believed to have averted a strained relationship between the president and Vice President Kashim Shettima, which was allegedly on the brink of escalating into a full-blown fallout.

According to sources close to the presidency, the initial rejection of the bills by the governors had created tension between Tinubu and Shettima.

It is understood that the open involvement of Borno State Governor Babagana Zulum in a media campaign against the bills was seen as a direct challenge to the president.

Zulum had said that the bills are likely to have devastating consequences for the Northern region.

The Northern governor also said that if the bills get passed into law, only Lagos State would be the beneficiary.

The governors had initially opposed the bills due to the perception that the proposed 60% derivation principle would unfairly favour Lagos State, which generates more than half of the national VAT revenue. However, in the revised version endorsed by the governors, the derivation principle was slashed to 30%.

He frowned at the speed by which the bills progressed at the legislature.

“Why the rush? The Petroleum Industry Bill took almost 20 years before it was finally passed. But this tax reform bill is being transmitted and receiving legislative attention within a week. It should be treated carefully and with caution so that even after our exit, our children will reap its benefits,” Zulum had said.

It should be noted that the National Economic Council (NEC), chaired by Vice President Shettima, had in 2024 rejected the bills.

Tinubu’s kitchen cabinet is understood to have considered Zulum’s action an affront to the president.

Although the president and his close allies did not publicly respond to Zulum’s criticisms, sources at the presidential villa reportedly revealed that the governor’s actions caused tension between the president and the vice president.

“Nigerians know the relationship between the Borno State governor and vice president just as they know the relationship between the Lagos State governor and the president. The voice of the governor of Lagos State might be taken for that of the president, who is his political godfather.

“It’s in the same way Zulum’s action could be seen as signifying Shettima’s position on any issue, rightly or wrongly. So people may not be too wrong if they say it’s a case of Esau’s hand, Jacob’s voice,” a presidential source said.

“That was why the governors, on the platform of the Nigeria Governors Forum, had to review their initial position on the bills and endorse an amended version of the documents,” the source added.