The Nigeria Governors Forum have accepted the tax reforms presnted to the National Assembly by President Bola Ahmed Tinubu, accepting the modification of revenue sharing formula on Value Added Tax, VAt.
A new formula of 50% on equality, 30% on and 20% on derivation was a,adopted.
The decision was arrived at during a meeting between the Nigeria Governors Forum and the Presidential Tax Reform Committee held on January 16, 2025 in Abuja.
The meeting also resolved that VAT and Company Income Yax should no be increased.
Below is the communique:
Communiqué issued by the Nigeria Governors Forum at the end of the consultations and engagement with the Presidential Tax Reform Committee
We, members of the Nigeria Governors’ Forum (NGF) 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:
1. 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:
50% based on equality,
30% based on derivation, and
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.
H.E. Abdul Rahman Abdul Razaq
Chairman, Nigeria Governors’ Forum & Governor of Kwara State
