National Telescope national telescope newspaper
The Nigeria Governors’ Forum (NGF) has expressed its strong support for the tax reform bills submitted by President Bola Tinubu to the National Assembly but has rejected any increase in the Value Added Tax (VAT) rate.
This endorsement came after a meeting with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, in Abuja, which took place on Thursday.
The meeting culminated in a communique signed by the NGF Chairman and Governor of Kwara State, Abdulrahman Abdulrazaq. The forum also proposed a revised and equitable VAT sharing formula aimed at ensuring fair distribution of resources among states.
“We, members of the Nigeria Governors’ Forum and the Presidential Tax Reform Committee, convened on January 16, 2025, to discuss critical national issues, including the reform of Nigeria’s fiscal policies and tax system. After careful deliberation, we agreed on a revised VAT sharing formula,” the communique read. It further detailed that 50% of VAT revenue should be allocated based on equality, 30% based on derivation, and 20% based on population.
The governors firmly rejected any increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time, citing the need to maintain economic stability.
They also advocated for the continued exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and encourage agricultural growth.
Additionally, the governors emphasized that there should be no terminal clause for agencies like the Tertiary Education Trust Fund, National Agency for Science and Engineering Infrastructure, and the National Information Technology Development Agency when it comes to sharing development levies outlined in the proposed tax reform bills.
The NGF also reaffirmed its support for the ongoing legislative process at the National Assembly, urging the continuation of efforts that would lead to the eventual passage of these important tax reform bills.
The forum reiterated the need to modernize Nigeria’s outdated tax laws to enhance fiscal stability and bring them in line with global best practices.
President Tinubu had earlier submitted four tax reform bills to the National Assembly in October 2024, following the recommendations of the Presidential Committee on Fiscal and Tax Reforms.
These bills include the Nigeria Tax Bill 2024, which outlines the country’s fiscal framework for taxation, and the Tax Administration Bill, designed to provide a clear legal structure for taxes in Nigeria.
Other bills include the Nigeria Revenue Service Establishment Bill, aimed at repealing the Federal Inland Revenue Service Act, and the Joint Revenue Board Establishment Bill, which would establish a tax tribunal and tax ombudsman.
