Governors Commend National Assembly For Approving Tax Reform Bills

 

The 36 State Governors, under the umbrella of the Nigeria Governors’ Forum (NGF), have expressed strong support for the ongoing legislative process at the National Assembly aimed at passing the Tax Reform Bills.

This position was outlined in a communiqué issued after a high-level consultation between the NGF and the Presidential Tax Reform Committee held in Abuja.

According to the communiqué signed by NGF Chairman, Governor AbdulRahman AbdulRazaq of Kwara State, the Governors endorsed a revised Value Added Tax (VAT) sharing formula to promote equitable resource distribution. The proposed formula allocates 50% of VAT based on equality, 30% based on derivation, and 20% based on population.

The Governors also emphasized maintaining the current VAT rate and Corporate Income Tax (CIT) levels to ensure economic stability.

The communiqué reads:“We, members of the Nigeria Governors’ Forum (NGF) and the Presidential Tax Reform Committee, convened on January 16, 2025, to deliberate on critical fiscal issues, including the reform of Nigeria’s tax system, and reached the following resolutions:

• The Forum reaffirmed its commitment to modernizing Nigeria’s outdated tax laws to strengthen fiscal stability and align with global best practices.

• Members supported a revised VAT sharing formula to ensure fairness: 50% based on equality, 30% based on derivation, and 20% based on population.

• The Forum opposed any increase in VAT rates or reductions in CIT at this time to safeguard economic stability.

• It also advocated for the continued exemption of essential goods and agricultural produce from VAT to protect citizens' welfare and boost agricultural productivity.”
  

Additionally, the Governors recommended removing any terminal clauses for TETFUND, NASENI, and NITDA in the sharing of development levies as stipulated in the proposed bills.

The communiqué concluded with the Governors' support for the continuation of the legislative process to ensure the successful passage of the Tax Reform Bills.