In a significant move to bolster revenue generation, the Nigerian Governors’ Forum (NGF) has approved a series of tax reforms while opposing a proposed increase in the Value Added Tax (VAT) rate. The decision was reached after a crucial meeting with the Presidential Tax Reform Committee in Abuja.
The NGF Chairman, addressing journalists post-meeting, highlighted the governors’ unanimous rejection of the VAT hike, cited concerns over its potential adverse effects on consumers and businesses. Instead, the governors have consented to a revised VAT sharing formula, aimed at ensuring a more equitable allocation of resources.
Under the new arrangement, 50% of VAT revenues will be distributed equally among all states, 30% will be allocated based on derivation, and the remaining 20% will be distributed according to population.
This revised formula is intended to provide states with a fair share of VAT revenues, reflective of their contributions to the national economy and demographic weight. The NGF’s support for these tax reforms underscored a collective effort to reduce reliance on oil revenues, foster economic growth, and promote development across the nation.
The NGF’s stance is widely regarded as a forward-thinking approach, balancing the need for increased revenue with the imperative of shielding Nigerians from excessive tax burdens.
