Presidential Tax Committee Rejects Governors’ Proposed New VAT Sharing Formula

The Presidential Tax Committee has expressed no objection to the revised “equitable” sharing formula for Value Added Tax (VAT) proposed by state governors.....KINDLY READ THE FULL STORY HERE▶

This statement was made by the chairman of the committee, Taiwo Oyedele, on Saturday.

During an appearance on The Platform, an event organized by The Covenant Nation, Oyedele emphasized that reaching a consensus on such reforms requires balancing technical insights and political considerations.

Previously, state governors rejected the 20 percent equality-based VAT-sharing formula proposed by Oyedele’s committee, which included 60 percent based on derivation and 20 percent based on population.

However, following discussions with the committee, the governors, under the Nigeria Governors’ Forum (NGF), presented a revised formula: 50 percent based on equality, 30 percent on derivation, and 20 percent on population.

Commenting on the development, Oyedele stated on Saturday that the committee has accepted the new proposal.

“You need to consider political factors alongside technical ones. Once the governors proposed their revised formula for VAT distribution, we have no objections because progress often happens step by step. Sometimes, you need to pause, gather more data, and then move forward,” he said.

The chairman of the committee assured that the new VAT-sharing formula will benefit all sectors of the economy.

He encouraged those still skeptical about the proposal to review the details, particularly the provisions aimed at supporting priority sectors like agriculture, manufacturing, and innovation.

“All sectors will see positive impacts, especially in agriculture, manufacturing, and other industries. The tax bills also include incentives for priority sectors like power generation and innovation. This reflects where the government aims to redirect its focus,” Oyedele added.