The Nigeria Governors’ Forum (NGF) has reiterated its support for overhauling the country’s outdated tax system and proposed a revised Value Added Tax (VAT) distribution formula to ensure fairness.
This was disclosed in a communique issued by its Chairman, Governor AbdulRahman AbdulRazaq of Kwara State, following a meeting with the Presidential Tax Reform Committee in Abuja on Thursday.
The governors proposed a VAT sharing formula of 50% based on equality, 30% on derivation, and 20% on population. The communique emphasized the importance of updating Nigeria’s fiscal framework to align with global best practices and enhance economic stability. It also called for the continued exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and boost agricultural productivity.
The Federal Executive Council approved four tax reform bills in October 2024, which President Bola Tinubu subsequently forwarded to the National Assembly. The proposed bills include the Nigeria Tax Bill 2024, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill. These bills aim to modernize Nigeria’s tax system, though they have sparked diverse reactions nationwide.
The Northern Governors Forum, backed by northern lawmakers and traditional rulers, has opposed the bills, particularly the VAT provisions, citing potential socio-economic disadvantages for the region.
