The thirty-six state governors, under the aegis of the Nigeria Governors’ Forum (NGF) Thursday parleyed the federal government on the tax reform bills forwarded to the National Assembly by President Bola Ahmed Tinubu.
And at the end of the meeting, they expressed their support for the National Assembly, urging the lawmakers to proceed with the legislative process on the bills.
Also, in another major resolution, the governors backed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources.
These were some of the resolutions of the NGF’s engagement of subnational consultations and engagement with the Chairman of Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele.
…The Bills
President Tinubu, had, October 2024, transmitted four tax reform bills to the National Assembly for consideration.
This was consequent upon the recommendations by the Presidential Committee on Fiscal and Tax Reforms for the review of the nation’s current tax laws, headed by Oyedele.
They are; Nigeria Tax Bill 2024 which seeks to provide the fiscal framework for taxation in the country, the Tax Administration Bill, which is expected to provide a clear and concise legal framework for all taxes in the country and eliminate disputes arising from the collection of taxes.
The rest are the Nigeria Revenue Service Establishment Bill, expected to repeal the Federal Inland Revenue Service Act and in its place, establish the Nigeria Revenue Service, and lastly, the Joint Revenue Board Establishment Bill which seeks to create a tax tribunal and a tax ombudsman.
Also at different times, the Oyedele-led committee had said the governors were not readily available for consultation.
They, however, singled out the duo of Lagos state Governor Babajide Sanwa-Olu and his Kaduna counterpart, Senator Uba Sani, who was represented by his deputy, as making out time for consultation.
…The resolutions
But rising from a consultation with Oyedele and his team, the governors said it was high time Nigeria had a modern tax system that would enhance fiscal stability and align with global best practices.
Announcing the NGF’s collective decision in a communiqué, the forum’s chairman and governor of Kwara state, Malam Abdul Rahman Abdul Razaq, said the governors endorsed a revised VAT sharing formula to ensure equitable distribution of resources of 50% based on equality, 30% based on derivation, and 20% based on population.
“We, members of the Nigeria Governors’ Forum (NGF) and presidential tax reform committee, convened on the 16th of January 2025 to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system, and arrived at the following resolutions:
“The Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws. Members acknowledged the importance of modernizing the tax system to enhance fiscal stability and align with global best practices.
“The Forum endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources: 50% based on equality, 30% based on derivation, and 20% based on population.
“Members agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time, to maintain economic stability. The Forum advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
“The meeting recommended that there should be no terminal clause for TETFund, NASENI, and NITDA in the sharing of development levies in the bills.
“The meeting supports the continuation of the legislative process at the National Assembly that will culminate in. the eventual passage of the Tax Reform Bills,” the governors said.