The Nigeria Governors’ Forum (NGF) has rejected the proposed increase in Value Added Tax (VAT) and expressed their full support for the ongoing legislative process surrounding the Tax Reform Bills.
At a meeting held on January 16, 2025, between the NGF and the Presidential Tax Reform Committee, the governors deliberated on critical issues concerning Nigeria’s fiscal policies and tax system.
In a statement signed by the NGF Chairman and Kwara State Governor, Abdulrahman AbdulRazaq, the Forum outlined its resolutions:
Key Resolutions from the Meeting:
1. Support for Tax Reforms:
The Forum reaffirmed its commitment to modernizing Nigeria’s outdated tax laws, emphasizing the importance of aligning the system with global standards to enhance fiscal stability.
2. Revised VAT Sharing Formula:
The governors proposed a new VAT sharing structure:
50% based on equality
30% based on derivation
20% based on population
3. Opposition to VAT Increase:
Members unanimously agreed to oppose any increase in the VAT rate or reduction in Corporate Income Tax (CIT) to safeguard economic stability.
They also emphasized exempting essential goods and agricultural products from VAT to protect citizens’ welfare and promote agricultural productivity.
4. Continuation of Development Levies:
The Forum recommended that no terminal clauses be applied to TETFUND, NASENI, and NITDA in the sharing of development levies.
5. Legislative Support:
The NGF encouraged the National Assembly to expedite the legislative process to ensure the timely passage of the Tax Reform Bills.
Context and Implications
This development comes as Nigeria works to address fiscal challenges and boost revenue generation through comprehensive tax reforms.
The NGF’s stance highlights the need for equitable distribution of resources and policies that prioritize citizens’ well-being.
Leave a Reply