NIGERIA; Governors Reject VAT Increase, Back Tax Reform Bills For Fiscal Stability

By Ameenat Hamzat, Lagos, Nigeria 

The Nigeria Governors’ Forum (NGF) has rejected the Tinubu proposed increase in the Value Added Tax (VAT) rate, firmly expressing their support for the entire tax reform.

The governors made their position clear during a meeting with the Presidential Tax Reform Committee held on Thursday.

The dialogue centered on key national issues, including modernising Nigeria’s tax system to enhance fiscal responsibility.

In an official statement, the Chairman of the NGF and Governor of Kwara StateAbdulrahman AbdulRazaq, highlighted the forum’s resolutions and emphasised on the need of reforming outdated tax laws to align with global best practices.

He noted that these reforms are vital for fiscal stability and economic growth.

He said; “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:

“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.”