By Chidi Ugwu
The 36 State governors, under the aegis of Nigerian Governors’ Forum (NGF) on Thursday endorsed a revised Value Added Tax (VAT) sharing formula reiterating that the new forumla ensures equitable distribution of resources.
The endorsement was part of resolutions AT the end of the subnational consultations and engagement with Presidential Tax Reform Committee, which held in Abuja.
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In a communiqué issued by Abdul Rahman Abdul Razaq, the Chairman, Nigeria Governors’ Forum & Governor of Kwara State, after the meeting convened on the 16th of January 2025, the Forum stated that Governors unianimously endorsed the revised VAT sharing formula of 50% based on equality, 30% based on derivation, and 20% based on population.
According to the communiqué, 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.
“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” reads part of the communique.
