The Nigeria Governors’ Forum (NGF) has thrown its weight behind the proposed tax reforms currently before the National Assembly.
In a communique issued at the end of its consultations and engagement with the Presidential Tax Reform Committee, the NGF, comprising of the 36 state governors, however, called for a revised Value Added Tax (VAT) sharing formula to ensure an equitable distribution of resources.
The Forum reiterated its support for an overhaul of Nigeria’s “archaic tax laws” and the modernisation of the tax system to enhance fiscal stability and align with global best practices.
The revised Value Added Tax (VAT) sharing formula, according to the Forum, should be 50% based on equality, 30% based on derivation, and 20% based on population.
To maintain economic stability, members also agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) for now. It further advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
Furthermore, the NGF recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of
development levies in the bills.
The Forum declared that it is in full support of the continuation of the legislative process at the National Assembly, which will culminate in the eventual passage of the Tax Reform Bills.