The Nigeria Governors’ Forum (NGF) has finally thrown its weight behind the proposed tax reform bills currently at the national assembly.
In a statement on Thursday, the group proposed an
“equitable” sharing formula for value-added tax (VAT).
The development was an outcome of a meeting between the NGF
and the presidential tax reform committee, convened on January 16, 2025, to
deliberate on critical national issues, including the reform of Nigeria’s
fiscal policies and tax system.
According to the statement, the governors recommended that
there should be no terminal clause for TETFUND, National Agency for Science and
Engineering Infrastructure (NASENI), and National Information Technology
Development Agency (NITDA) in the sharing of development levies in the bills.
They also supported the continuation of the legislative
process at the national assembly that will culminate in the eventual passage of
the tax reform bills.
“The Forum reiterated its strong support for the
comprehensive reform of Nigeria’s archaic tax laws. Members acknowledged the
importance of modernizing the tax system to enhance fiscal stability and align
with global best practices,” the statement reads.
“The Forum endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources: 50% based on equality, 30% based on derivation, and 20% based on population.
“Members agreed that there should be no increase in the VAT
rate or reduction in Corporate Income Tax (CIT) at this time, to maintain
economic stability.”
The group advocated for the continued exemption of essential
goods and agricultural produce from VAT to safeguard the welfare of citizens
and promote agricultural productivity.
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