The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has reassured Nigerians that the funds generated from Value Added Tax (VAT) under the proposed tax reform bills will be transparently managed and directed toward national priorities.

Addressing a one-day roundtable on tax reform bills organised by the National Institute for Legislative and Democratic Studies (NILDS) in Abuja recently, Oyedele stressed that the bills currently under consideration in the National Assembly include clear provisions to prevent misuse of VAT proceeds.

He stated, “The reforms provide clarity on tax generation and expenditure. They emphasize addressing national priorities like education, healthcare, infrastructure, and poverty alleviation rather than unnecessary projects.”

Oyedele pointed out that the reforms introduced a structured framework for tax collection and spending, ensuring that no state governor or local authority can divert VAT funds to non-essential or extravagant projects.

He also criticised previous expenditures on impractical projects such as underutilised state airports, low-traffic flyovers, and underperforming shopping malls, which he described as misplaced priorities.

According to him, the proposed framework also seeks to rectify issues related to borrowing and subsidies.

He highlighted the inefficiency of borrowing in foreign currencies for domestic investments and subsidising unproductive projects, urging a shift towards better spending alignment.

Clarifying misconceptions surrounding the role of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), he explained that VAT does not fall under the commission’s purview as it is classified as state revenue.

He said, “VAT is considered state revenue, not part of the federation’s regular revenue. It goes to a special pool account shared among states and local governments, with a small portion retained by the federal government for administrative purposes.”

He also refuted claims that the Federal Inland Revenue Service (FIRS) intends to engage tax consultants such as Alpha Beta Company for VAT collection, stressing that the proposed reforms explicitly prohibit FIRS from outsourcing routine tax collection operations.

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