Adebayo Adenrele
Nigerian Governors under the auspices of Nigeria Governors’ Forum (NGF) have endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources.
This decision was reached and contained in a communique issued at the end of the Subnational Consultations and Engagement with the Presidential Tax Reform Committee.
According to them, there should be 50% based on equality, 30% based on derivation, and 20% based on population.
The communique reads, “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 population.
“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”.