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How proposed tax reforms will address current imbalance – FIRS Chair, Zacch Adedeji

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The FIRS Chairman explained that the current VAT sharing arrangement primarily benefits Lagos, the FCT, and Rivers—states where most corporate head offices are located.He further noted that the proposed reforms aim to address this imbalance by introducing a derivation principle model, ensuring a more equitable distribution of VAT revenues to all states, regardless of their economic status.Today, I just reeled out of the data on this month of October sharing. I just signed it on Friday.

Today, Lagos will take 42% of the VAT. Rivers will take 16%. Oyo State will take 5.2%, FCT will take 9%. If you take those 3 States, they are taking more than 70% of the tax. “Why? Because those are the places where the head offices of those places are. And we know that 70% of consumption is not happening in those three states. So in whatever way you look at it, there is no way every other state apart from Lagos, Rivers, FCT, benefits from the proposed tax bill.“If you look at it, MTN contributed highest, but because MTN headquarters is in Lagos, all the allocation from MTN is being accrued to Lagos. So, when this bill is passed, all states will benefit irrespective of the kind of economic situation that is happening in Nigeria,” Adedeji said.Derivation Principle for Consumption Tax In addition, the FIRS Chairman clarified that the derivation principle model applies specifically to consumption tax or Value Added Tax (VAT).In his address, Adedeji emphasized that this model should not be mistaken for the derivation principle applied to oil-producing states, which is based on the location of production.He explained that, in the case of consumption tax, derivation means the funds will be allocated to the states where the commodity is consumed, rather than the states where corporate head offices are situated.“On derivation, I see there is a mix-up here. We have the oil and gas. If you look at the oil and gas, where they produce is where we sell and collect money from the oil. That’s why it is limited to their States. “VAT by definition is a consumption tax. If you use derivation in VAT, what it means is that where is it consumed. Where do you make the call? Where is the bank transaction done? What the bill seeks to correct is that the existing structure we have does not represent the intent of Nigeria,” Adedeji added.What you should know The new tax bills under consideration in the National Assembly propose adopting a derivation principle in the allocation of VAT revenues between the federal government and sub-national entities.These proposals have sparked controversy, with northern elites openly rejecting them, arguing that the changes may not favor their region.Under the current Section 40 of the VAT Act, VAT revenue is allocated as follows: 15% to the Federal Government, 50% to the States and Federal Capital Territory (FCT), and 35% to Local Governments. The allocation to states and local governments incorporates a derivation principle of at least 20%.Although not explicitly detailed in the VAT Act, other factors influencing the distribution include 50% based on equality and 30% based on population.Additionally, 4% of collections are allocated to the Federal Inland Revenue Service (FIRS) as a collection fee, while 2% goes to the Nigeria Customs Service (NCS) for import VAT.

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Rescue Mission: Governor Dauda Lawal Approves N7.2 billion for Community Projects Across Zamfara

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Zamfara State Government under the leadership of Governor Dauda Lawal has earmarked N7.2 billion for development projects across 375 communities in the state, under the Nigeria Community Action for Resilience and Economic Stimulus (NG-CARES), a World Bank-funded initiative. Deputy Governor Mani Mummuni disclosed this in Gusau on Tuesday while flagging off a free project implementation training programme for participants drawn from 158 communities across the state.

He explained that Governor Dauda Lawal had approved the N7.2 billion for various community development projects through the State Community and Social Development Agency (CSDA), adding that the funds would finance projects spanning health, education, water supply, agriculture and drainage, among others, across the state’s 14 Local Government Areas. The deputy governor noted that the projects would be implemented by Community Project Monitoring Committees (CPMCs) under the supervision of the CSDA, and reiterated the state government’s commitment to providing social amenities to vulnerable communities.

Mummuni urged participants to ensure transparency and accountability in managing resources for project execution in their communities, describing the initiative as part of Governor Lawal’s administration’s effort to extend the dividends of democracy to the people, especially at the grassroots level. He expressed confidence that the training under CSDA would encourage community participation in project implementation, while also promoting transparency, accountability, and commitment to the development of their communities.

In his remarks, the General Manager of CSDA, Umar Nakwada, revealed that the participants were drawn from CPMCs responsible for monitoring projects in their communities, and that the training was designed to sensitise them on effective project implementation. He stated that the training covered Batch A projects worth N3.2 billion, spanning 158 communities, and assured that the agency would ensure effective monitoring of all projects to be implemented by CPMC members in benefiting communities. Nakwada also commended Governor Lawal for his unwavering support in improving the livelihoods of grassroots communities.

Also speaking, the State NG-CARES Coordinator, Mukhtar Ibrahim, praised the Zamfara Government for its commitment to supporting the livelihoods of vulnerable households. He explained that NG-CARES aims to expand access to livelihood support, food security services, and grants for poor and vulnerable households and firms, focusing on three result areas: livelihood and social support, food security and agricultural value chain, as well as micro and small enterprises recovery. small enterprises recovery,” Ibrahim said.

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ICPC, PenCom recover N3bn unremitted pension deductions from defaulting firms

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The Independent Corrupt Practices and Other Related Offences Commission and the National Pension Commission have recovered over N3bn in unremitted pension contributions from defaulting employers as both agencies intensified efforts to enforce compliance with the Pension Reform Act 2014.The recovery was disclosed in a statement issued by the National Pension Commission on Wednesday, which said the funds had been fully remitted into the Retirement Savings Accounts of affected employees.According to the commission, the recovery was achieved through a joint ICPC-PenCom enforcement initiative designed to address pension contribution defaults and protect workers’ retirement savings.It stated, “The Independent Corrupt Practices and Other Related Offences Commission and the National Pension Commission have recovered over N3bn in unremitted pension contributions from employers.”

PenCom explained that the recovered funds were obtained from defaulting employers in the electricity sector and credited to the respective Retirement Savings Accounts of affected workers in line with the Pension Reform Act 2014.“The recovered funds, obtained from defaulting employers in the electricity sector, have been fully remitted into the respective Retirement Savings Accounts of affected employees in accordance with the provisions of the Pension Reform Act 2014,” the statement read.The commission said the development demonstrated the effectiveness of its partnership with the ICPC in ensuring compliance with pension laws and compelling employers to fulfil their statutory obligations.

It said, “The recovery demonstrates the effectiveness of the partnership between PenCom and ICPC in enforcing compliance with the PRA 2014 and ensuring that employers fulfil their statutory pension obligations.”PenCom recalled that it signed a Memorandum of Understanding with the ICPC in October 2025 to strengthen collaboration in the recovery of unremitted pension contributions, the investigation of pension-related infractions, and the enforcement of compliance with the Pension Reform Act 2014.

The commission added that the ICPC was currently investigating several private-sector employers referred by PenCom for alleged non-compliance with the Act, expressing optimism that further recoveries would be made as the investigations progressed.“The ICPC is currently investigating several private-sector employers referred by PenCom for non-compliance with the PRA 2014. With the ongoing collaboration, additional recoveries would be achieved as the investigations progress,” it stated.PenCom reiterated that the Pension Reform Act requires employers to deduct and remit pension contributions into employees’ Retirement Savings Accounts within seven working days after salaries are paid.It warned that employers who fail to comply risk sanctions.“Failure to comply with this requirement constitutes a violation of the law and attracts sanctions, including the recovery of outstanding contributions, penalties and, where necessary, prosecution,” the statement said.

The commission urged employers, particularly those in the private sector, to regularise outstanding pension remittances and comply fully with the provisions of the Act to avoid regulatory and enforcement action.It reaffirmed its commitment to protecting workers’ retirement savings, promoting compliance with the Contributory Pension Scheme, and ensuring that pension contributions deducted from employees are promptly remitted into their Retirement Savings Accounts.The PUNCH recently reported that the National Pension Commission intensified its enforcement drive to ensure nationwide compliance with the Contributory Pension Scheme by launching a specialised, high-level monitoring platform targeting non-compliant subnational governments.The initiative is part of an ongoing strategy to deepen pension reform at the subnational level and secure a sustainable retirement future for public servants across the states of the federation.

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DSS Arrests Former Minister Geoffrey Nnaji; Hands Over to ICPC

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Operatives of the Department of State Services (DSS), on Wednesday morning, arrested former Minister of Science and Technology, Uche Nnaji, at the Akanu Ibiam International Airport, Enugu.Security sources said Nnaji, who resigned last October under controversial circumstances, was arrested by DSS officers on request by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and handed him to the Anti-Graft Agency.The sources further notes that the ICPC had extended several invitations to the former minister following petitions on how he managed his Ministry, and therefore contacted the DSS to assist in arresting him.

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