Details have emerged why the 36 State Governors of the Federation have finally declared support for the proposed Tax Reform Bills of President Bola Tinubu.
Recall that most of the Northern State Governor, both of the ruling All Progressives Congress (APC) and the Peoples Democratic Party (PDP), had expressed strong opposition against the Bills which are before the National Assembly for consideration and passage into law.
It was reliably gathered that the Governors who belong to the same political parties have strong influence on their respective National Assembly members who could always guide them on the direction to go.
Finally, the Governors, under the umbrella of the Nigeria Governors’ Forum (NGF), rose from a meeting with the Oyedele-led Presidential Tax Reform Committee and declared in a communique as follows:
“We, members of the Nigeria Governors’ Forum (NGF) and Presidential Tax Reform Committee, convened on the 16th of January 2025, pto deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system, and arrived at the following resolutions:
1. 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.
2. 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.
3. 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.
4.The meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in the sharing of development levies in the bills.
5.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 communique was signed by the Chairman, Nigeria Governors’ Forum and Governor of Kwara State, AbdulRahman AbdulRazaq.
Rising from this, it appears the coast is finally clear for the consummation of the Bills by the National Assembly after weeks of scary differences between some of the Northern Governors and President Tinubu.
