Governors of the 36 States of the federation on the aegis of the ‘Nigeria Governors’ Forum (NGF)’, rose from meeting with members of the Presidential Tax Reform Committee, on Thursday, January 16, 2025, declaring their rejection of the plan by the Federal Government to increase the Value Added Tax (VAT).
The Governors specifically said that the move was untimely, even as they expressed support for the Tax Reform Bills that had generated so much controversy across the country.
Members of the Forum also advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
A communique issued at the end of the meeting which was signed by the NGF’s chairman, Mr AbdulRahman AbdulRazaq, who is also the Governor of Kwara State expressed support for a comprehensive reform of what they described as “Nigeria’s archaic tax laws” and acknowledged the importance of modernizing the tax system to enhance fiscal stability and align with global best practices.
The communique stated; “The Forum endorsed a revised Value Added Tax, VAT sharing formula to ensure equitable distribution of resources.
“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 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,” it stated.
Find below the communique issued at the end of the Forum’s meeting in Abuja
COMMUNIQUE ISSUED AT THE END OF THE SUBNATIONAL 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:
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.
𝐒𝐢𝐠𝐧𝐞𝐝
H.E. AbdulRahman AbdulRazaq
Chairman, Nigeria Governors’ Forum & Governor of Kwara State.
