The Nigeria Governors Forum (NGF) has endorsed the Federal Government’s tax reform bills, signaling progress in modernizing Nigeria’s tax system. After extensive deliberations with the Presidential Tax Reform Committee, the NGF has proposed a revised Value-Added Tax (VAT) sharing formula that aims to balance equality, derivation, and population in resource allocation.
The proposed formula allocates 50% of VAT revenue equally among all states, 30% based on state-generated revenue, and 20% based on population size. This approach seeks to address resource allocation disparities and ensure equitable tax revenue distribution.
The NGF reaffirmed its commitment to overhauling Nigeria’s outdated tax laws. The governors opposed increases in the VAT rate and reductions in Corporate Income Tax (CIT). They also advocated for the continued exemption of essential goods and agricultural produce from VAT.
The NGF also addressed concerns regarding development levies and recommended that no terminal clauses be introduced for key development agencies like TETFund, NASENI, and NITDA.
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