The Nigeria Governors’ Forum (NGF) has officially endorsed the tax reform bills submitted by President Bola Tinubu to the National Assembly.
In a communique issued on Thursday after a meeting with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, in Abuja, the governors emphasized the need for equitable fiscal policies.
Signed by the NGF Chairman and Governor of Kwara State, Abdulrahman Abdulrazaq, the communique proposed a new Value-Added Tax (VAT) sharing formula:
- 50% based on equality
- 30% based on derivation
- 20% based on population
The governors underscored the importance of comprehensive tax reform to modernize Nigeria’s fiscal system and enhance economic stability.
Key Resolutions:
- No VAT Rate Increase or CIT Reduction: The Forum rejected any increase in VAT rates or reduction in Corporate Income Tax (CIT) to maintain economic stability.
- Essential Goods Exemptions: Advocacy for continued VAT exemptions on essential goods and agricultural produce to protect citizens’ welfare.
- Support for Development Levies: No terminal clause for key agencies like TETFund, NASENI, and NITDA in sharing development levies.
- Legislative Process Continuation: Full support for the ongoing legislative process to pass the tax reform bills.
The Tax Reform Bills:
President Tinubu submitted four critical bills on October 3, 2024:
- Nigeria Tax Bill 2024: Provides a fiscal framework for taxation.
- Tax Administration Bill: Establishes a clear legal framework for all taxes and reduces disputes.
- Nigeria Revenue Service Establishment Bill: Repeals the Federal Inland Revenue Service Act and establishes a new revenue body.
- Joint Revenue Board Establishment Bill: Introduces a tax tribunal and tax ombudsman.
The NGF’s endorsement signals strong subnational support for the reforms aimed at aligning Nigeria’s tax system with global best practices while fostering fiscal stability and equity.