The Nigeria Governors’ Forum (NGF), in collaboration with the Presidential Tax Reform Committee, has reaffirmed its dedication to reforming Nigeria’s tax system to achieve fiscal stability, equitable development, and alignment with global best practices. The resolutions were issued in a communiqué following a strategic consultation held in Abuja on January 16, 2025.
The meeting, chaired by H.E. AbdulRahman AbdulRazaq, Governor of Kwara State and Chairman of the NGF, brought together governors from across the federation. Discussions centered on implementing tax reforms to modernize fiscal policies, stimulate economic growth, and ensure the equitable distribution of resources.
Key Highlights and Resolutions
- Modernization of Tax Laws:
The NGF underscored the necessity of updating Nigeria’s antiquated tax laws. The governors emphasized that reforms should prioritize efficiency, transparency, and fiscal sustainability, positioning Nigeria as a competitive global player in tax administration. - Revised VAT Sharing Formula:
A revised framework for the allocation of Value Added Tax (VAT) was adopted to reflect equity and fairness across states. The formula includes:- 50% allocated equally to all states,
- 30% based on derivation, and
- 20% based on population.
This approach seeks to address disparities in state resources while promoting balanced economic development.
- No Increase in VAT or Reduction in CIT:
To maintain macroeconomic stability, the Forum resolved against any increase in VAT rates or reduction in Corporate Income Tax (CIT) at this time. Additionally, it reaffirmed the continued exemption of essential goods and agricultural produce from VAT to protect low-income households and support the agricultural sector. - Support for Development Levies:
The Forum called for the sustained funding of key national agencies such as TETFUND, NASENI, and NITDA by recommending the removal of terminal clauses in their development levy allocation. This decision aims to ensure the uninterrupted execution of critical projects in education, technology, and innovation. - Endorsement of Legislative Reforms:
The NGF expressed strong support for the ongoing legislative processes at the National Assembly geared toward the passage of Tax Reform Bills. The governors noted that these reforms are vital to building a more robust and equitable fiscal framework.
Speaking on behalf of the NGF, H.E. AbdulRahman AbdulRazaq commended the collaborative efforts of stakeholders in advancing the tax reform agenda. He emphasized that these reforms would not only address existing fiscal challenges but also serve as a catalyst for economic transformation, paving the way for a more inclusive and prosperous Nigeria.
The Forum reiterated its commitment to fostering sustainable development through sound fiscal policies and continued engagement with relevant stakeholders.
