The Nigeria Governors’ Forum (NGF) has shown support for the proposed tax reform bills currently being deliberated at the National Assembly while calling for an equitable sharing formula for Value-Added Tax (VAT) among states.
This stance was conveyed in a statement issued on Thursday, where the NGF revealed that the decision was reached after a meeting with the Presidential Tax Reform Committee on 16th January 2025.
The meeting addressed critical national issues, including the ongoing efforts to reform Nigeria’s fiscal policies and tax system.
The NGF acknowledged the need for an overhauled tax system to enhance revenue generation and promote economic stability.
The forum emphasized the importance of a fair VAT sharing formula that takes into account the economic realities and developmental needs of all states.
The statement reads, “We, members of the Nigeria Governors’ Forum (NGF) and presidential tax reform committee, convened on the 16th of January 2025 to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system, and arrived at the following resolutions:
“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 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 Forum advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
“The meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies in the bills.
“The meeting supports the continuation of the legislative process at the National Assembly that will culminate in. the eventual passage of the Tax Reform Bills.”
