The Nigeria Governors’ Forum (NGF) has expressed strong opposition to the Federal Government’s proposed increase in Value Added Tax (VAT), describing the move as untimely.
In a communique issued after a meeting held on Thursday in Abuja, the governors outlined their stance on critical fiscal policies, including President Bola Tinubu’s controversial Tax Reform Bills, which they backed with certain conditions.
“We, members of the Nigeria Governors’ Forum, NGF, and Presidential Tax Reforms 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 communique stated.
The governors underscored their support for comprehensive reforms to modernize Nigeria’s tax system, emphasizing the importance of aligning the country’s fiscal policies with global best practices to enhance economic stability.
Key Resolutions:
- No VAT Increase: The Forum rejected any plans to increase the VAT rate, citing concerns over economic stability. They also opposed any reduction in Corporate Income Tax (CIT) at this time.
- VAT Sharing Formula: The governors endorsed a revised VAT sharing formula to ensure equitable distribution of resources across states.
- Protection of Citizens’ Welfare: The NGF called for the continued exemption of essential goods and agricultural produce from VAT to safeguard citizens’ welfare and support agricultural productivity.
- Development Levies: The Forum recommended that there should be no terminal clause for agencies such as TETFUND, NASENI, and NITDA in the sharing of development levies under the proposed tax reforms.
- Support for Tax Reform Bills: The governors supported the legislative process for the passage of the Tax Reform Bills, urging lawmakers to consider these recommendations during deliberations.
“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 communique read.
