The Nigeria Governors’ Forum (NGF) has firmly opposed the proposed increase in Value Added Tax (VAT) from 7.5% to 10%, calling the initiative untimely. This decision emerged after a meeting held in Abuja on Thursday, during which the governors discussed critical national issues, including ongoing tax reform efforts.
Last year, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, announced plans to propose a VAT increase to the National Assembly, aimed at addressing Nigeria’s low tax revenue and fiscal challenges. He highlighted the need for comprehensive reforms to the country’s fiscal policies and tax system.
In a communique issued after the meeting, the governors expressed their support for modernizing Nigeria’s tax laws to enhance fiscal stability and align with global standards. They advocated for a revised VAT sharing formula that allocates resources based on equality (50%), derivation (30%), and population (20%).
The governors unanimously agreed to maintain the current VAT rate and not reduce Corporate Income Tax (CIT) to ensure economic stability. They emphasized the importance of exempting essential goods and agricultural products from VAT to protect the welfare of citizens and promote agricultural productivity.
The meeting also recommended that development levies remain unaffected by terminal clauses in the ongoing legislative process concerning the Tax Reform Bills currently under consideration in the National Assembly.
As discussions continue regarding tax reforms, the governors remain committed to ensuring that any changes prioritize the economic stability and welfare of the Nigerian populace.
