Former Secretary to the Government of the Federation, Babachir Lawal, has stated that Northern states could boost their revenue significantly by imposing levies on agricultural products and livestock produced in the region.
Lawal made this assertion in a press statement addressing the contentious tax reform bill, which has sparked debates between Northern and Southern stakeholders.
In his statement, Lawal criticized perceptions from certain Southern commentators, who he claimed regard Northern opposition to the bill as indicative of laziness and dependence on national resources.
He argued that the North contributes significantly to the nation through its agricultural and livestock production, much of which is consumed in the South.
According to him, imposing levies on these products would enhance revenue for Northern states, where the raw materials originate, rather than concentrating revenue generation in Southern states through value addition.
“I have closely examined the arguments surrounding the tax reform bills. The North has come out studiously in opposition to the bills; in particular, the provisions as regards VAT collection and distribution have been most contentious.
“The South on its part, arguably with few exceptions, has come out vociferously in support of the bills not minding the fact that most of their states are in the same basket with the Northern states.”
Using his home state, Adamawa, as an example, Lawal outlined how strategic levies could transform the state’s revenue base.
He noted that over 30,000 cattle are sold weekly in Adamawa’s international cattle markets, with the majority transported to Southern states for processing into products such as sausages and raw beef.
These processed goods are subsequently taxed through VAT, but the revenue is attributed to the Southern states where value addition occurs.
“If Adamawa imposes a levy of N5,000 per cow, the state would generate approximately N7.8 billion annually,” Lawal argued. “This would ensure that the state, as the origin of the raw material, benefits directly from the production cycle.”
Lawal also highlighted the vast quantities of paddy rice produced in Adamawa’s agricultural regions, including Fufore, Numan, Demsa, and Shelleng.
He estimated that 90% of the nearly one million metric tons of paddy rice produced annually in these areas are transported out of the state to rice mills located in Southern Nigeria.
The VAT accrued from the sale of milled rice, he noted, is credited to the Southern states where the companies operate, leaving the Northern states without direct economic benefits from their agricultural output.
“A levy of N50,000 per ton of rice paddy could yield N50 billion annually for Adamawa State,” Lawal asserted.
He extended this argument to other crops, stating that maize, beans, and sorghum could generate estimated revenues of N100 billion, N20 billion, and N10 billion annually, based on 2023 farm yield data.
Lawal condemned what he described as a “disdain” for the North among Southern proponents of the tax reform, emphasizing that such attitudes undermine national unity and equitable development.
He argued that the current tax distribution system disproportionately favors states with value-adding industries, while neglecting the contribution of agricultural production in the North.