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JUST IN: Governors Oppose VAT Hike, Advocate For Equitable Revenue Sharing

The Nigeria Governors’ Forum (NGF) has firmly opposed the proposed increase in Value Added Tax (VAT)...

By Muhammad B. Muhammad

The Nigeria Governors’ Forum (NGF) has firmly opposed the proposed increase in Value Added Tax (VAT), emphasizing that the move is untimely and could destabilize the economy.

Following a meeting in Abuja on Thursday, the governors reaffirmed their commitment to tax reforms but insisted that VAT should not be raised beyond the current 7.5%. Instead, they advocated for a revised VAT revenue-sharing formula to ensure fair distribution across states.

Revised VAT Sharing Formula:

  • 50% based on equality
  • 30% based on derivation
  • 20% based on population

The governors also stressed the need to modernize Nigeria’s tax system while ensuring that essential goods and agricultural products remain exempt from VAT. They further opposed any reduction in Corporate Income Tax (CIT), warning that such measures could impact economic stability.

Additionally, the NGF recommended that development levies allocated to TETFUND, NASENI, and NITDA should not be subject to a terminal clause, ensuring their sustained funding.

Despite rejecting the VAT hike, the governors expressed support for the ongoing legislative process on the Tax Reform Bills at the National Assembly, signaling their commitment to comprehensive fiscal reforms.

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