Tax reform Czar argues MTN pays the most VAT, in pitch for equitable sharing
By Jeph Ajobaju, Chief Copy Editor
MTN pays more than N200 billion in Value Added Tax (VAT) monthly, making it the largest contributor to the national VAT pool, says Presidential Fiscal Policy and Tax Reforms Committee Chairman, Taiwo Oyedele.
Oyedele made the disclosure as a panellist on a Town Hall on Tax Reforms hosted by Channels Television, explaining that the reforms seek to address disparities in the current VAT sharing formula.
According to him, the current formula allocates all VAT paid by MTN to Lagos where its headquarters is located even though the services that generate this revenue are bought countrywide.
He stressed that “MTN is the largest contributor to VAT in Nigeria. So they, in fact, pay VAT of over N200 billion every month; the gap between them and number two is huge.
“Today, all the VAT paid by MTN is credited and attributed to Lagos State, even as calls are made in Kano, the FCT [Federal Capital Territory], Ekiti, Edo, or Kebbi.”
Oyedele said the reform bills propose adjustments to ensure a more equitable distribution of VAT revenues across states based on actual consumption rather than the location of corporate headquarters of the entities providing goods and services.
He added that under the new framework for instance, Lagos, which currently retains the entire N200 billion VAT, would see its share reduced to approximately 20 per cent, while other states across the federation would benefit from a fairer distribution.
“This adjustment ensures that states where the VAT is generated get their fair share,” he insisted.
“When you analyse the data, you see Lagos State’s share reduces slightly, but every other state gains.”
The Tax Reform Bills, which aim to address longstanding issues in Nigeria’s fiscal policies, include provisions for revenue redistribution, addressing inefficiencies, and promoting fairness in the tax system.
The proposals have sparked national debate, with critics accusing Abuja of pushing policies that could adversely affect some parts of the country.
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