Why Nigerian Governors Forum Backs Tax Reforms
The Nigeria Governors’ Forum (NGF) has endorsed a revised Value Added Tax (VAT) sharing formula, which it believes will ensure equitable distribution of Nigeria’s resources.
The details were disclosed in a communiqué issued on Thursday and signed by AbdulRahman AbdulRazaq, Chairman of the Nigeria Governors’ Forum and Governor of Kwara State.
The communiqué was released at the end of sub-national consultations and engagements with the Presidential Tax Reform Committee and other relevant stakeholders including the Federal Inland Revenue Service.
According to the communiqué, following deliberations between the NGF and the Presidential Tax Reform Committee on critical national issues, including reforms to Nigeria’s fiscal policies and tax system, the forum arrived at several resolutions.
First, 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 NGF endorsed a revised VAT-sharing formula aimed at the equitable distribution of resources:
50% based on equality,
30% based on derivation, and
20% based on population.
Members also agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time.
This decision, they noted, was aimed at maintaining economic stability.
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“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 communique also added.
Furthermore, the communiqué stated that attendees supported the continuation of the legislative process at the National Assembly, which will culminate in the eventual passage of the Tax Reform Bills.
