The Nigeria Governors’ Forum (NGF) and the Presidential Tax Reform Committee have reaffirmed their commitment to overhauling the country’s tax system to foster economic stability and ensure fairness in resource distribution. At a meeting held on January 16, 2025, the forum outlined several resolutions aimed at modernizing Nigeria’s fiscal policies.
Speaking after the meeting, Governor AbdulRahman AbdulRazaq of Kwara State, who chairs the NGF, emphasized the importance of overhauling Nigeria’s outdated tax laws. “We strongly support comprehensive tax reforms that align with global best practices. Modernizing our tax system is critical to achieving fiscal stability and driving sustainable development,” he stated.
One key resolution was the endorsement of a revised Value Added Tax (VAT) sharing formula. The new arrangement proposes allocating 50% of VAT revenue based on equality, 30% based on derivation, and 20% based on population. The governors believe this approach will ensure a more equitable distribution of resources across states.
In addition, the forum rejected any increase in the VAT rate or reduction in the Corporate Income Tax (CIT) rate, citing concerns over economic stability. “At this time, we must prioritize the welfare of citizens and protect businesses from undue financial pressures,” the forum noted. They also advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard food security and boost agricultural productivity.
The meeting further resolved that there should be no terminal clauses for agencies such as the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA) in the allocation of development levies.
The governors also expressed their support for the ongoing legislative process in the National Assembly, urging swift passage of the Tax Reform Bills. “The legislative process must continue uninterrupted to ensure the success of these critical reforms,” Governor AbdulRazaq added.
The resolutions mark a significant step in Nigeria’s efforts to improve its fiscal policy framework and address long-standing challenges in revenue allocation and economic management.
