••• reject termination of TETFUND, NASENI, NITDA.
By Anastasia John E.
The Nigeria Governors’ Forum (NGF) has approved President Bola Tinubu’s tax reform bills for passage by the National Assembly. This decision was announced in a statement following a meeting with Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, in Abuja on Thursday, January 16, 2024.
Some governors had previously expressed concerns regarding specific provisions in the four-part bills, particularly the proposed sharing formula for Value-Added Tax (VAT). Many complaints originated from the northern region, where political and religious leaders alleged systemic alienation from national resources and urged the President to withdraw the bills. In response to this outcry, the National Assembly paused further action on the bills to facilitate wider consultations with stakeholders.
In a communique signed by NGF Chairman and Kwara State Governor AbdulRahman AbdulRazaq, the governors proposed a revised VAT sharing formula aimed at equitable resource distribution. They suggested a formula allocating 50% based on equality, 30% based on derivation, and 20% based on population.
The communique stated, “We, members of the Nigeria Governors’ Forum and the Presidential Tax Reform Committee, convened on January 16, 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 governors also 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. They advocated for the continued exemption of essential goods and agricultural produce from VAT to protect citizens’ welfare and promote agricultural productivity.
However, the governors rejected the proposed termination clause for the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA) concerning the sharing of development levies in the bills. They expressed their support for the continuation of the legislative process at the National Assembly, which will lead to the eventual passage of the tax reform bills.
On October 3, 2024, President Tinubu submitted the four tax reform bills to the National Assembly for consideration, following recommendations from the Presidential Committee on Fiscal and Tax Reforms. The bills include the Nigeria Tax Bill 2024, the Nigeria Revenue Service Establishment Bill, the Joint Revenue Board Establishment Bill, and the Tax Administration Bill.
The Nigerian Governors’ Forum has proposed a VAT sharing formula of 50% based on equality, 30% based on derivation, and 20% based on population.
