Governors of the 36 states of the federation have finally thrown their weight behind the controversial tax reform bills months after they earlier rejected them.
At a meeting of the Nigerian Governors Forum (NGF) on Thursday, the governors, however, proposed a new sharing formula for the Valued-Added Tax (VAT).
They want 50 per cent of the VAT to be shared based equality, 30 per cent based on derivation, and 20 per cent based on population.
The governors also recommended there must be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) for now for economic stability.
In addition, they suggested that there should be no terminal clause for TETFUND, the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA) in the sharing of development levies in the bills, supporting tthe 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 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 said in a statement issued after the meeting.