|By Kolawole Ejalonibu
- Governors endorse tax reforms to modernize Nigeria’s fiscal system.
- NGF proposes 50-30-20 VAT sharing formula for equity.
- Calls for preservation of current VAT rates and exemption for essential goods.
The Nigeria Governors’ Forum (NGF) has declared its support for the tax reform bills submitted by President Bola Tinubu to the National Assembly, emphasizing the need for fiscal modernization and equity.
This position was communicated in a statement released on Thursday after a meeting in Abuja with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele.
The communique, signed by NGF Chairman and Kwara State Governor, Abdulrahman Abdulrazaq, highlighted the forum’s proposal for a revised Value-Added Tax (VAT) sharing formula. The governors recommended a fair distribution of VAT revenues: 50% based on equality, 30% based on derivation, and 20% based on population.
“We, members of the Nigeria Governors’ Forum and the Presidential Tax Reform Committee, convened on January 16, 2025, to address pressing national issues, including the overhaul of Nigeria’s fiscal and tax policies,” the communique read.
The governors reaffirmed their commitment to reforming outdated tax laws to foster fiscal stability and align with global standards. They also agreed to maintain the current VAT rate and Corporate Income Tax (CIT) to preserve economic stability.
Additionally, the NGF stressed the importance of exempting essential goods and agricultural products from VAT to protect citizens’ welfare and promote agricultural growth.
The forum opposed any terminal clause for development-focused agencies such as the Tertiary Education Trust Fund, the National Agency for Science and Engineering Infrastructure, and the National Information Technology Development Agency in the distribution of levies outlined in the bills.
The NGF further expressed support for the legislative process in the National Assembly, aimed at passing the tax reform bills, which were first transmitted by President Tinubu on October 3, 2024.
These bills include:
- Nigeria Tax Bill 2024: Establishing a fiscal framework for taxation.
- Tax Administration Bill: Providing clarity and reducing disputes in tax administration.
- Nigeria Revenue Service Establishment Bill: Repealing the Federal Inland Revenue Service Act and creating the Nigeria Revenue Service.
- Joint Revenue Board Establishment Bill: Introducing a tax tribunal and ombudsman.
The NGF emphasized the significance of these reforms in strengthening Nigeria’s fiscal system and driving economic progress.
