.The Nigeria Governors’ Forum (NGF) has endorsed the tax reform bills sent to the National Assembly by President Bola Tinubu.
The governors made their position and proposals known after meeting with the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele.
In a communique, the NGF proposed a revised VAT sharing formula and called for 50% equality among states, 30% derivation (states that contribute more get more), and 20% population.
The governors stressed the need for economic stability and advised against increasing VAT or reducing CIT now.
NGF also proposed the continued exemption of essential goods and agricultural products from VAT to protect citizens’ welfare and agriculture.
The forum kicked against inclusion of terminal clauses for agencies like TETFUND, NASENI and NITDA in development levies sharing.
Lastly, the governors expressed their support for the lawmakers in the National Assembly to pass the tax reform bills into law.
Background of the Tax Reform Bills
President Tinubu sent four tax reform bills to the National Assembly in October 2024 after the Presidential Committee on Fiscal and Tax Reforms’ recommendations.
The bills are to modernize Nigeria’s tax system, fiscal stability and align with global best practices.
The bills include:
Nigeria Tax Bill 2024: A fiscal framework for taxation.
Tax Administration Bill: A clear legal framework for tax administration to reduce disputes.
Nigeria Revenue Service Establishment Bill: Repeals the Federal Inland Revenue Service Act and replaces with Nigeria Revenue Service.
Joint Revenue Board Establishment Bill: A tax tribunal and ombudsman for tax governance.
The aim is to modernize Nigeria’s tax system to boost revenue and fiscal sustainability. The revised VAT formula will also address the state’s disparity.
These bills seek to simplify the tax administration in order to reduce conflicts and increase compliance.
A clearer tax policies will reduce the burden on administration. Households will stop experiencing extra burden as essential goods remain VAT exempt.