Ola Akinwunmi
In a significant development, the Nigeria Governors’ Forum (NGF) has officially endorsed the Tax Reform Bills proposed by President Bola Ahmed Tinubu’s administration. This decision marks a major turnaround, as the governors had previously rejected the bills due to concerns over inadequate consultation and potential negative impacts on state revenues.
The NGF Chairman, Governor AbdulRahman AbdulRazaq of Kwara State, announced the governors’ support for the reforms after a meeting in Abuja. The governors proposed a revised formula for sharing Value Added Tax (VAT) revenue, which allocates resources based on equality, derivation, and population.
The Key Recommendations of the endorsement are a revised VAT Sharing Formula that ensures equitable distribution of resources across the country. The governors advocated that there should be no VAT rate Increase.The governors opposed any increase in VAT rate or reduction in Corporate Income. Furthermore, to maintain economic stability, the governors want continued exemption of essential goods and agricultural produce from VAT to safeguard citizens’ welfare and promote agricultural productivity.
They also recommended no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies.The governors’ endorsement is a crucial step towards the passage of the Tax Reform Bills, which aim to promote economic stability and growth. With the NGF’s support, the legislative process is expected to move forward, paving the way for the eventual passage of the bills.