The Nigeria Governors’ Forum has publicly voiced its support for the tax reform bills submitted by President Bola Tinubu to the National Assembly, signaling its endorsement of the proposed changes to Nigeria’s tax laws.
On Thursday, the state governors announced their support for President Bola Tinubu’s tax reform bills during a meeting with Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, in Abuja. This endorsement was formally communicated via a communiqué released at the end of the gathering.
As documented in the communiqué signed by Abdulrahman Abdulrazaq, Governor of Kwara State and NGF Chairman, the forum proposed a more equitable sharing arrangement for Value-Added Tax (VAT).
In their recommendations, the governors’ proposed a revised VAT sharing formula that allocates 50% of resources equally among states, 30% based on derivation, and the remaining 20% based on population.
The statement reads, “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 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 highlighted that the provisions related to the Tertiary Education Trust Fund, National Agency for Science and Engineering Infrastructure, and National Information Technology Development Agency should not include a terminal clause for the sharing of development levies.
“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 statement added.
In October, President Tinubu forwarded four tax reform bills to the National Assembly for consideration, initiating the review of existing tax laws in compliance with the recommendations made by the Presidential Committee on Fiscal and Tax Reforms.
Among the four bills are the Nigeria Tax Bill 2024, which is designed to establish a comprehensive fiscal framework for taxation within the nation, and the Tax Administration Bill, which aims to provide a simplified, transparent, and comprehensive legal framework for all taxes in Nigeria, thereby minimizing potential tax disputes.
