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The Nigeria Governors’ Forum has finally thrown its weight behind the tax reform bills submitted by President Bola Tinubu to the National Assembly.
The state governors made this known in a communique issued on Thursday at the end of a meeting with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, in Abuja.
In the communique signed by the NGF Chairman and Governor of Kwara State, Abdulrahman Abdulrazaq, the forum proposed an equitable sharing formula for Value-Added Tax.
The governors said the revised VAT sharing formula must ensure equitable distribution of resources of 50% based on equality, 30% based on derivation, and 20% based on population.
The communique read, “We, members of the Nigeria Governors’ Forum 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 modernising 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 governors stated that there should be no terminal clause for the Tertiary Education Trust Fund, National Agency for Science and Engineering Infrastructure and National Information Technology Development Agency in the sharing of development levies in the bills.
They also supported the continuation of the legislative process at the National Assembly that will culminate in the eventual passage of the tax reform bills.
“The Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws. Members acknowledged the importance of modernising the tax system to enhance fiscal stability and align with global best practices,” the statement added.
PUNCH Online reports that on October 3, 2024, Tinubu transmitted four tax reform bills to the National Assembly for consideration, following the recommendations of the Presidential Committee on Fiscal and Tax Reforms for the review of existing tax laws.
The bills include the Nigeria Tax Bill 2024, which is expected to provide the fiscal framework for taxation in the country, and the Tax Administration Bill, which will provide a clear and concise legal framework for all taxes in the country and reduce disputes.
Others are the Nigeria Revenue Service Establishment Bill, which will repeal the Federal Inland Revenue Service Act and establish the Nigeria Revenue Service, and the Joint Revenue Board Establishment Bill, which will create a tax tribunal and a tax ombudsman.
