Governors Endorse Tax Reform Bills, Demand Fair VAT Sharing Formula

The Nigeria Governors’ Forum (NGF) has voiced its support for the proposed tax reform bills currently under consideration in the National Assembly.....KINDLY READ THE FULL STORY HERE▶

The forum also emphasized the need for an “equitable” Value-Added Tax (VAT) sharing formula to ensure a fair distribution of resources among states.

In a statement issued on Thursday, the NGF disclosed that this resolution was reached during a meeting with the Presidential Tax Reform Committee on January 16, 2025.

The meeting addressed critical national matters, including ongoing efforts to reform Nigeria’s fiscal policies and tax system.

The NGF highlighted the importance of overhauling the tax framework to boost revenue generation and promote economic stability.

The forum stressed that an equitable VAT sharing formula should reflect the economic realities and developmental needs of all states.

The statement reads:
“We, members of the Nigeria Governors’ Forum (NGF) and the Presidential Tax Reform Committee, convened on January 16, 2025, to deliberate on pressing national issues, including reforms to Nigeria’s fiscal policies and tax system. The following resolutions were reached:

• The Forum reaffirmed its strong support for the comprehensive reform of Nigeria’s outdated tax laws, recognizing the need to modernize the system to ensure fiscal stability and alignment with global best practices.
• Members endorsed a revised VAT sharing formula for equitable resource allocation:
  • 50% based on equality,
  • 30% based on derivation,
  • 20% based on population.
• Members agreed to maintain the current VAT rate and Corporate Income Tax (CIT) levels to preserve economic stability.
• The Forum advocated for the continued exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and encourage agricultural development.”