By Seyi Odewale
The Nigeria Governors’ Forum has finally endorsed President Bola Tinubu’s tax reform bills in the National Assembly.
The state governors made this known in a communique issued yesterday after meeting with Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, in Abuja.
In the communique signed by Abdulrahman Abdulrazaq, the NGF Chairman and Governor of Kwara State, the Forum proposed an equitable sharing formula for Value-Added Tax.
The governors said the revised VAT sharing formula must ensure an equitable distribution of resources: 50 percent based on equality, 30 percent based on derivation, and 20 percent based on population.
The communique read, “We, members of the Nigeria Governors’ Forum and Presidential Tax Reform Committee, convened on January 1 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 modernising 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 percent based on equality, 30 percent based on derivation, and 20 percent based on population.
“Members agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) 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 governors stated that there should be no terminal clause for the Tertiary Education Trust Fund, National Agency for Science and Engineering Infrastructure, and National Information Technology Development Agency in the bills regarding the sharing of development levies.
They also supported the continuation of the legislative process at the National Assembly, which will culminate in the eventual passage of the tax reform bills.
“The Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws. Members acknowledged the importance of modernising the tax system to enhance fiscal stability and align with global best practices,” the statement added.
It was reported that on October 3, 2024, Tinubu transmitted four tax reform bills to the National Assembly for consideration, following the recommendations of the Presidential Committee on Fiscal and Tax Reforms for reviewing existing tax laws.
The bills include the Nigeria Tax Bill 2024, which is expected to provide the fiscal framework for taxation in the country, and the Tax Administration Bill, which will give a clear and concise legal framework for all taxes in the country and reduce disputes.
Others are the Nigeria Revenue Service Establishment Bill, which will repeal the Federal Inland Revenue Service Act and establish the Nigeria Revenue Service, and the Joint Revenue Board Establishment Bill, which will create a tax tribunal and a tax ombudsman.
