Nigeria Governors’ Forum Holds First Meeting of 2025, Backs Tax Reform Bills with Proposed VAT Sharing Formula
Thank you for reading this post, don't forget to subscribe!Members of the Nigeria Governors’ Forum (NGF) met on Wednesday at the forum’s secretariat in Abuja for the first session of 2025. While the agenda of the meeting remained undisclosed at press time, key figures such as U.S. Ambassador to Nigeria, Richard Mills, and Minister of Women Affairs, Imaan Sulaiman-Ibrahim, attended alongside several state governors, including those from Kwara, Lagos, Abia, and Ogun, as well as deputy governors.
At their previous meeting in January, the governors expressed support for the Federal Government’s tax reform bills but proposed changes to the Value-Added Tax (VAT) sharing formula. The new formula recommended by the governors aims to ensure a more equitable distribution of resources. They suggested a breakdown of 50% based on equality, 30% on derivation, and 20% on population.
The NGF also advocated for the exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and enhance agricultural productivity. Additionally, the forum called for no increase in VAT rates or reduction in Corporate Income Tax (CIT) at this time, in order to maintain economic stability. They also recommended that agencies like TETFUND, NASENI, and NITDA should not have terminal clauses in the sharing of development levies as proposed in the bills.
Despite the contentious nature of the tax reform bills, the governors expressed their continued support for the legislative process, which is expected to culminate in the eventual passage of the reforms. Last year, President Bola Tinubu submitted four tax reform bills to the National Assembly, including the tax administration bill and a proposal to replace the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service.
The bills have faced opposition from various regional leaders, particularly in the north, who argue that the proposed changes could disadvantage their region. Despite these objections, President Tinubu remains committed to pushing forward with the bills, assuring that they are designed to benefit all Nigerians.
