Nigeria Governors’ Forum backs comprehensive tax reforms

By Saheed Ibrahim
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The Nigeria Governors’ Forum (NGF) has reaffirmed its strong backing for the overhaul of the country’s outdated tax laws, underscoring the importance of modernising the tax system to foster fiscal stability and align with global standards.
This resolution emerged from the Forum’s meeting with the Presidential Tax Reform Committee on January 16, 2025.
A communiqué released at the conclusion of the discussions highlighted several key decisions designed to ensure fair resource distribution and economic stability.
Notably, the NGF endorsed a revised Value Added Tax (VAT) sharing formula. Under the new structure, 50% of VAT revenue will be allocated on the basis of equality, 30% according to derivation, and 20% based on population.
The Forum also emphasised the need for no increase in the VAT rate or reduction in the Corporate Income Tax (CIT) rate at this stage in order to sustain economic stability.
It further advocated for the continued exemption of essential goods and agricultural products from VAT to protect citizens’ welfare and enhance agricultural productivity.
In addition, the NGF called for the retention of development levies for TETFund, NASENI, and NITDA in the tax reform bills, rejecting the inclusion of any terminal clauses for these funds.
The meeting also expressed its support for the ongoing legislative process at the National Assembly to facilitate the eventual passage of the Tax Reform Bills.
The communiqué was signed by AbdulRahman AbdulRazaq, Chairman of the NGF and Governor of Kwara State, who stressed the importance of collaborative efforts to establish a robust and inclusive tax system.