Governors under the Nigeria Governors’ Forum (NGF) have thrown their weight behind the proposed Tax Reform Bills introduced by President Bola Ahmed Tinubu, while recommending significant adjustments to the Value Added Tax (VAT) sharing formula for equitable resource distribution.
During a meeting at the Transcorp Hilton, Abuja, chaired by Kwara State Governor AbdulRahman AbdulRazaq, the NGF proposed a VAT-sharing model of 50% for equality, 30% for derivation, and 20% for population. This contrasts with the Federal Government’s initial proposal of 20% for equality, 60% for derivation, and 20% for population. The governors believe their model will balance resource allocation and address disparities between regions.
Governor Abdullahi Sule of Nasarawa State emphasized that the adjustments resolve contentious issues and ensure fiscal fairness. He noted that the North, often disadvantaged by economic policies, stands to benefit from this revised framework. He expressed relief that concerns over increased VAT rates, which could exacerbate inflation, were addressed, preserving economic stability in the region.
The governors collectively advocated for the exclusion of essential goods and agricultural produce from VAT to safeguard citizens’ welfare and promote agricultural productivity. Additionally, they supported retaining development levies for agencies such as TETFUND, NASENI, and NITDA, vital for national growth.
The forum expressed optimism about the continuation of legislative processes in the National Assembly to ensure the bills’ passage. A communique issued by the NGF reaffirmed their commitment to modernizing Nigeria’s tax system to align with global best practices and enhance fiscal stability.
Representatives from the North’s civil society groups, youth, and student bodies also backed the reforms during a symposium in Kaduna. They called on Northern leaders to harness the region’s potential and leverage the reforms to revitalize its socioeconomic heritage.
