The Nigerian Governors’ Forum has rejected the proposal to increase the Value-Added Tax (VAT) from 7.5% to 10%.
The forum announced this in a communiqué released after its meeting in Abuja on Thursday. The communiqué endorsed the tax reform bills currently before the National Assembly.
The governors’ position is against the federal government’s stance, which has proposed a VAT increase from 7.5% to 10% in one of the tax reform bills.
“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 communique, signed by its chairman, Governor AbdulRahman AbdulRazaq of Kwara State, reads in part.
It continued, “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.
“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.”
