Nigerian Governors Reject VAT Hike, Back Tinubu’s Tax Reform Bills

The Nigeria Governors’ Forum (NGF) has opposed the Federal Government’s proposal to increase Value Added Tax (VAT), describing it as poorly timed.

Following a meeting held in Abuja on January 16, 2025, the governors released a statement expressing their stance. While supporting President Bola Tinubu’s Tax Reform Bills, they emphasized the need for caution regarding VAT adjustments.

In their communiqué, the governors reaffirmed their commitment to overhauling Nigeria’s outdated tax system, citing the importance of aligning fiscal policies with global standards to promote stability. They advocated for an equitable VAT sharing formula that ensures fair resource distribution.

The communique reads, “We, members of the Nigeria Governors’ Forum, NGF and Presidential Tax Reforms Committee, convened on the 16th of January 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 Forum endorsed a revised Value Added Tax, VAT sharing formula to ensure equitable distribution of resources:

“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 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.”