BREAKING: Nigerian Governors Back Tax Reform Bills, Propose VAT Sharing Formula

 



The Nigeria Governors’ Forum (NGF) has expressed its support for the proposed tax reform bills that are currently before the National Assembly. In a statement released on Thursday, the group also proposed a new formula for the sharing of Value Added Tax (VAT).

This development follows a meeting between the NGF and the Presidential Tax Reform Committee on January 16, 2025. The meeting was held to discuss key national issues, including the reform of Nigeria’s fiscal policies and tax systems.

Communique Issued at the End of the Subnational Consultations and Engagement with the Presidential Tax Reform Committee:

The NGF and the Presidential Tax Reform Committee deliberated on several critical issues, resulting in the following resolutions:

1. The NGF reiterated its strong support for the comprehensive reform of Nigeria’s outdated tax laws. The members acknowledged the importance of modernizing the tax system to improve fiscal stability and align with global best practices.


2. The NGF endorsed a revised VAT sharing formula to ensure equitable distribution of resources:


50% based on equality,


30% based on derivation,


20% based on population.




3. Members agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time in order to maintain economic stability. They also advocated for the continued exemption of essential goods and agricultural produce from VAT to support the welfare of citizens and promote agricultural productivity.



4. The NGF recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies as part of the reform bills.



5. The NGF supported the continuation of the legislative process at the National Assembly, which is expected to culminate in the passage of the Tax Reform Bills.




The communique was signed by H.E. AbdulRahman AbdulRazaq, Chairman of the Nigeria Governors’ Forum and Governor of Kwara State.

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