Nigeria tax spat opens country’s smouldering north-south divide

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Nigeria tax spat opens country’s smouldering north-south divide
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Critics warn President Bola Tinubu’s proposed changes to VAT distribution will help wealthier southern states

Nigeria’s government is facing stiff opposition to a controversial tax reform bill that northern leaders say favours more productive southern states, reawakening a historic regional divide in Africa’s most populous country.

Currently, 50 per cent of the total VAT distributed to states is shared equally, while 30 per cent is allocated based on population size and 20 per cent by their tax contribution, or derivation. Tinubu now wants 60 per cent to be allocated based on contribution, while cutting the population quota to 20 per cent. Northern lawmakers, including some from Tinubu’s All Progressives Congress, have stalled the bills in parliament amid calls for further dialogue.

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