NGF Backs Revised Value Added Tax Sharing Formular

By Ayodele Oni

The Nigeria Governors’ Forum (NGF), has endorsed a revised Value Added Tax (VAT) sharing formular.

Under the new framework, 50 percent of VAT revenue will be distributed based on equality, 30 percent on derivation, and 20 percent on population.

This was contained in a communiqué issued at the end of the forum’s consultations, and made public on the NGF X account.

The Forum had earlier met with the Presidential Tax Reform Committee on Thursday in Abuja.

The Forum also stressed that there should be no increase in the VAT rate or reduction in the Corporate Income Tax (CIT) rate at this time to maintain economic stability.

It advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard citizens’ welfare and promote agricultural productivity.

NGF expressed support for the comprehensive reform of the country’s archaic tax laws, emphasising the need to modernise the tax system to enhance fiscal stability and align with global best practices.

The NGF maintained that the key resolutions were aimed at ensuring equitable resource distribution and economic stability.

Furthermore, the NGF recommended the retention of development levies for TETFund, NASENI, and NITDA in the tax reform bills, rejecting any terminal clauses for these funds.

The meeting also expressed support for the legislative process at the National Assembly to ensure the eventual passage of the Tax Reform Bills.

The communiqué, signed by AbdulRahman AbdulRazaq, Chairman of the NGF and Governor of Kwara State, underscored the importance of collaborative efforts to achieve a robust and inclusive tax system.