The Nigeria Governors’ Forum (NGF) has expressed strong support for the tax reform bills proposed by President Bola Ahmed Tinubu while firmly rejecting any increase in Value-Added Tax (VAT). This position was outlined in a communique issued on Thursday following a meeting with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, in Abuja.
The communique, signed by the NGF Chairman and Governor of Kwara State, Abdulrahman Abdulrazaq, emphasized the need for a revised VAT sharing formula to ensure equitable resource distribution. The governors proposed a formula allocating 50% based on equality, 30% on derivation, and 20% on population.
The forum underscored its commitment to modernizing Nigeria’s tax system to align with global best practices and enhance fiscal stability. The communique stated:
> “We, members of the Nigeria Governors’ Forum 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 endorsed a revised 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 NGF also highlighted the importance of exempting essential goods and agricultural produce from VAT to protect citizens’ welfare and boost agricultural productivity.
Additionally, the forum rejected the inclusion of terminal clauses for key development agencies such as the Tertiary Education Trust Fund and the National Agency for Science and Engineering Infrastructure in the proposed tax reforms.
On October 3, 2024, President Tinubu transmitted four tax reform bills to the National Assembly, including the Nigeria Tax Bill 2024, which aims to establish a comprehensive fiscal framework for taxation. Other bills include the Tax Administration Bill, the Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill, which propose significant overhauls to the nation’s tax administration.
The governors reiterated their support for the legislative process, describing the reforms as crucial to Nigeria’s economic stability and development.
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