The Nigeria Governors’ Forum (NGF) has rejected the proposed increase in Value Added Tax (VAT).
In a communiqué issued after their meeting in Abuja on Thursday, January 16, the governors expressed support for the ongoing legislative process regarding the Tax Reform Bills currently before the National Assembly. However, they opposed the Federal Government’s proposal to raise the VAT rate from 7.5% to 10%, calling it untimely.
The communiqué, signed by the NGF Chairman and Kwara State Governor Abdulrahman Abdulrazaq, also called for a revised VAT sharing formula. The governors proposed a distribution model that allocates 50% based on equality, 30% based on derivation, and 20% based on population.
The governors agreed that increasing the VAT rate or reducing Corporate Income Tax (CIT) should not be pursued at this time in order to maintain economic stability. They also advocated for continued VAT exemptions on essential goods and agricultural products to protect citizens’ welfare and support agricultural productivity.
The communiqué further emphasized the governors’ commitment to modernizing Nigeria’s tax system. The forum endorsed the proposed VAT sharing formula and urged the removal of terminal clauses for TETFUND, NASENI, and NITDA in the sharing of development levies within the bills.
The NGF expressed its continued support for the passage of the Tax Reform Bills in the National Assembly.
