The Nigeria Governors’ Forum (NGF) has expressed its strong support for the ongoing legislative process to pass President Bola Tinubu’s Tax Reform Bills at the National Assembly, describing the reforms as essential for modernizing Nigeria’s fiscal policies.
In a communique issued after their meeting on Thursday, January 16, 2025, the governors agreed to retain the current Value Added Tax (VAT) rate and Corporate Income Tax (CIT) to ensure economic stability.
They also endorsed a revised VAT sharing formula, which allocates resources as follows: 50% based on equality, 30% based on derivation, and 20% based on population.
The communique, seen by Chronicle NG and signed by NGF Chairman and Kwara State Governor AbdulRahman AbdulRazaq, highlighted the Forum’s resolutions:
“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.”
The revised VAT sharing formula, according to the governors, is designed to promote fairness in resource distribution across the country while maintaining critical exemptions on essential goods and agricultural products to protect citizens’ welfare.
The Forum emphasized the importance of aligning Nigeria’s tax system with global best practices and maintaining fiscal stability to drive sustainable development.
