The 36 Nigeria Governors’ Forum, NGF, have brainstormed with the Federal Government on the tax reform bills forwarded to the National Assembly by President Bola Tinubu, proposing a new sharing formula if the tax reform bills must see the light of the day.
The governors, at the end of a meeting of subnational consultations and engagement, on Thursday in Abuja, with the Chairman of Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, have thrown their weight behind the continuation of the legislative process at the National Assembly that will culminate in the eventual passage of the Tax Reform Bills.
In a communique by the NGF Chairman and Governor of Kwara State, Abdul Rahman Abdul Razaq, said that the Forum endorsed a revised VAT sharing formula to ensure equitable distribution of resources of 50% based on equality, 30% based on derivation, and 20% based on population.
The governors have resolved that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time in order to maintain economic stability.
Also, they have called for the continued exemption of essential goods and agricultural produce from VAT as that would help safeguard the welfare of citizens and promote agricultural productivity.
They also, at the end of the meeting, recommended that there should be no terminal clause for
Tertiary Education Trust Fund, TETFUND; National Agency for Science and Engineering Infrastructure, NASENI, and National Information Technology Development Agency, NITDA, in the sharing of development levies in the bills.
The communique read in part: “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 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 meeting supports the continuation of the legislative process at the National Assembly that will culminate in. the eventual passage of the Tax Reform Bills.”
