The Nigeria Governors’ Forum (NGF) has firmly opposed any increase in the Value Added Tax (VAT) rate. This decision was part of several resolutions made during a crucial meeting with the presidential tax reform committee on January 16, 2025, focusing on the reform of Nigeria’s fiscal policies and tax system.
Governor Abdulrahman AbdulRazaq of Kwara State, who chairs the NGF, released a statement detailing the outcomes of the meeting. Key points from the discussions include:
Support for Tax Reform: The Forum expressed strong backing for updating Nigeria’s outdated tax laws, recognizing the necessity to modernize to achieve fiscal ility and comply with global standards.
VAT Sharing Formula: A new VAT distribution formula was proposed, suggesting a split of 50% on an equality basis, 30% based on derivation, and 20% according to population, aiming for a more equitable resource distribution across states.
Stance on Tax Rates: The governors agreed that there should be no increase in VAT or reduction in Corporate Income Tax (CIT) to maintain economic ility. They also advocated for maintaining VAT exemptions on essential goods and agricultural products to protect consumer welfare and boost agricultural output.
Development Levies: The meeting recommended against including termination clauses for agencies like TETFUND, NASENI, and NITDA in the allocation of development levies within the Tax Reform Bills.
Legislative Support: There was unanimous support for the ongoing legislative process concerning the Tax Reform Bills at the National Assembly, pushing for their eventual passage into law.
These resolutions reflect a cautious approach to fiscal policy ces, emphasizing the need for balance between revenue generation, economic ility, and the socio-economic well-being of Nigerian citizens. The NGF’s stance on these matters could significantly influence the direction and speed of tax reform in Nigeria.
Im not convinced about NGFs proposal. Will it really lead to a fair sharing formula or just create more disparities?
Why should NGF reject VAT increase? Is equitable sharing really the solution or just a band-aid fix? Lets discuss.
Shouldnt NGF focus on reducing wastage instead of proposing tax increases? Lets talk about efficiency, not just redistribution.
Who knew VAT could be so controversial? Lets discuss whether NGFs proposal for an equitable sharing formula is feasible or just wishful thinking.
Interesting move by NGF, but is an equitable sharing formula the best solution? Lets discuss this further.