Governors reject VAT increase, endorse tax reform bills

The Nigerian Governors’ Forum (NGF) has rejected the move to increase Value Added Tax (VAT) from 7.5% to 10%.

The forum made this known in a communiqué released after its meeting in Abuja on Thursday, endorsing the tax reform bills currently before the National Assembly.

The governors’ position is against the Federal Government’s stance, which has proposed an increase of VAT from 7.5% to 10% in one of the tax reform bills.

“Members agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time, 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 communique, signed by its chairman, Governor AbdulRahman AbdulRazaq of Kwara State, reads in part.

Related News

“We, members of the Nigeria Governors’ Forum (NGF) and presidential tax reform committee, convened on the 16th of January 2025 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 modernizing 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% based on equality, 30% based on derivation, and 20% based on population.

“The meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies in the bills.

“The meeting supports the continuation of the legislative process at the National Assembly that will culminate in. the eventual passage of the Tax Reform Bills”, the Nigerian Governor’s Forum (NGF) said.