Just In! Governors Support President Tinubu’s Tax Reform, Endorse Revised VAT Sharing Formula, Reject Increase In VAT 

Just In! Governors Support President Tinubu’s Tax Reform, Endorse Revised VAT Sharing Formula, Reject Increase In VAT 

 

By Adetokunbo FAKEYE

 

The Nigeria Governors’ Forum has given their support to President Tinubu’s Tax Reform Bills with endorsement of revised VAT sharing formula.

The governors support was made known in a Communique issued at the end of Subnational Consultations and Engagement meeting held with the Presidential Tax Reform Committee today, Thursday 16th, January, 2025 to deliberate on critical national issues, including the reform of
Nigeria’s fiscal policies and tax system.

The Communique signed by the Chairman, Nigeria Governors’ Forum and Governor of Kwara State, His Excellency AbdulRahman AbdulRazaq reads: “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.

2. The Forum endorsed a revised Value Added Tax (VAT)
sharing formula to ensure equitable distribution of resources:

o 50% based on equality,
o 30% based on derivation, and
o 20% based on population.

3. 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.

4. The meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of
development levies in the bills.

5. 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”.

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