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Governors Endorse Tax Reform Bills, Propose New VAT Sharing Formula

Friday, 17 January 2025

Nigerian Governors Forum (NGF),
The Nigeria Governors’ Forum (NGF) has thrown its weight behind the tax reform bills submitted by President Bola Tinubu to the National Assembly.

The Governors proposed a revised Value Added Tax (VAT) sharing formula, which ensures equitable distribution of resources.

According to the communique issued by the NGF on Thursday, the revised VAT sharing formula will be based on three key principles: “50% based on equality, 30% based on derivation, and 20% based on population.”

“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 communique read partly.

READ ALSO: “I Respect Tinubu, But Criticise His Policies” – Ndume Says Amid Opposition To Tax Reform Bill

The Governors “reiterated their strong support for the comprehensive reform of Nigeria’s archaic tax laws, acknowledging the importance of modernizing the tax system to enhance fiscal stability and align with global best practices.”

“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,” it added.

The NGF also advocated for the “continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.”

Additionally, the governors stated that there should be no terminal clause for the Tertiary Education Trust Fund, National Agency for Science and Engineering Infrastructure, and National Information Technology Development Agency in the sharing of development levies in the bills.

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via: Information Nigeria

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