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Nigerian Governors Support Tinubu’s Tax Reforms, Endorse Revised VAT Formula
The governors confirmed their agreement to retain the existing Value Added Tax (VAT) rate and Corporate Income Tax (CIT) to support economic stability.
Abuja, Nigeria– The Nigeria Governors’ Forum has expressed strong backing for the ongoing legislative efforts to pass President Bola Tinubu’s Tax Reform Bills currently before the National Assembly.
In a statement issued after their Thursday meeting, the governors confirmed their agreement to retain the existing Value Added Tax (VAT) rate and Corporate Income Tax (CIT) to support economic stability.
The communique, signed by the Chairman of the Nigeria Governors’ Forum and Kwara State Governor, AbdulRahman AbdulRazaq, also saw the governors endorse a revised VAT sharing formula.
Meanwhile, under the new arrangement, 50% of VAT revenue will be shared equally among states, 30% based on derivation, and 20% according to population, in a move aimed at promoting more equitable resource distribution.
The statement read, “We, members of the Nigeria Governors’ Forum (NGF) 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 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 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 popopulation.
It said, “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 meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies in the bills.
“The meeting supports the continuation of the legislative process at the National Assembly that will culminate in e eventual passage of the Tax Reform Bills,” he added.
