Nigerian governors have endorsed the federal government’s tax reform efforts aimed at updating the country’s outdated tax laws. This support was confirmed during a meeting between the Nigeria Governors’ Forum (NGF) and the Presidential Tax Reform Committee.
The governors agreed that reforming Nigeria’s tax system is necessary to improve fiscal stability and align with global standards. In a joint statement, they emphasized the need for fairness in resource allocation and proposed a new formula for sharing value-added tax (VAT):
- 50% based on equality
- 30% based on derivation
- 20% based on population
To avoid economic disruption, the governors recommended keeping the current VAT rate and Corporate Income Tax (CIT) unchanged. They also called for the continued exemption of essential goods and agricultural products from VAT to protect citizens and promote agriculture.
The NGF proposed that agencies like the Tertiary Education Trust Fund (TETFUND), National Agency for Science and Engineering Infrastructure (NASENI), and National Information Technology Development Agency (NITDA) should continue to receive development levies without time restrictions.
President Bola Tinubu introduced four tax reform bills last year, including proposals to replace the Federal Inland Revenue Service (FIRS) with the Nigeria Revenue Service. While some leaders, particularly from northern Nigeria, have opposed the bills, citing regional concerns, the president assured the nation that the reforms are not biased.
The governors urged the National Assembly to proceed with the legislative process and pass the bills, emphasizing their importance for national development.
