The New Tax Reform Bills (VAT Reform) – A Simple Explainer And Advisory

and accountability.

However, taxation is a complex, numbers-driven issue.

• How was it determined that Lagos is benefiting disproportionately? The conclusion was solely based on transparent data showing the disparities.

• Since these bills supposedly aim to improve fairness in VAT revenue distribution, there must be clear projections showing how much revenue each state is expected to collect and receive under the proposed system. These figures should be compared with what states currently receive under the existing system.

The government is hence advised to publish this data for public review, allowing citizens to assess the fairness of the new system based on actual numbers in comparison with the previous system.

If the data clearly shows increased equity, it would silence critics.

However, if the projections cannot be provided, it might be better to maintain the current VAT revenue-sharing formula for now while implementing the proposed location-based collection system.

This would allow the impact of the new collection method to be observed, particularly its effect on the current 20% derivation share.

Once the data demonstrates fairness, the legislature can then adjust the distribution formula to incorporate the 60% derivation share as proposed.

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