The Nigeria Governors’ Forum (NGF) has endorsed the Tax Reform Bills proposed by President Bola Ahmed Tinubu’s administration.
The decision was reached during a meeting in Abuja on Thursday, where the governors discussed the implications of the reforms.
The governors’ support of the reforms was announced by Chairman of the NGF, Governor AbdulRahman AbdulRazaq of Kwara State. He said certain adjustments must be made to safeguard the welfare of Nigerians and maintain fiscal balance.
The governors proposed a revised formula for the sharing of Value Added Tax (VAT) revenue to ensure equitable distribution across the country. The proposed formula allocates resources based on equality, derivation, and population. Additionally, the governors strongly opposed any increase in the VAT rate or reduction in Corporate Income Tax (CIT), arguing that such changes could exacerbate economic challenges in a country already facing inflation and other financial pressures.
The statement said, “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.”
It can be recalled that the governors had previously rejected the bills late last year, citing concerns over inadequate consultation and potential negative impacts on state revenues.