The Nigeria Governors’ Forum has endorsed a revised Value Added Tax sharing formula in the proposed Tax Reform Bills to ensure equitable distribution of resources across the country
This decision was taken at the end of the subnational consultations and engagement of the Presidential Tax Reform Committee.
They recommended that the sharing formula of VAT should be 50 percent, based on equity, 30 percent based on derivation and 20 percent based on consumption.
The meeting to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system also agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax at this time.
The Forum advocates continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
The Governors also recommended that there should be no terminal clause for TETFUND, NASENI and NITDA in the sharing of development levies in the bills.
Another significant outcome of the meeting between the NGF and the Presidential Tax Reform Committee is the support for the continuation of the legislative process at the National Assembly that will culminate in the eventual passage of the Tax Reform Bills.
