Governors Back Tax Reforms, Stand Firm Against VAT Increase – Key Insights
The Nigeria Governors’ Forum (NGF) has expressed support for President Bola Tinubu’s proposed tax reform bills but has rejected the proposed increase in the Value Added Tax (VAT) rate from 7.5% to 10%. The governors emphasized the need to maintain economic stability and advocated for the continued exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and promote agricultural productivity.
Additionally, the NGF endorsed a revised VAT sharing formula to ensure equitable distribution of resources among states: 50% based on equality, 30% based on derivation, and 20% based on population. They also recommended the removal of terminal clauses for the Tertiary Education Trust Fund (TETFUND), National Agency for Science and Engineering Infrastructure (NASENI), and National Information Technology Development Agency (NITDA) in the sharing of development levies.
The governors’ stance reflects a commitment to modernizing Nigeria’s tax system while addressing concerns about economic stability and equitable resource distribution.