Governors Support Tax Reforms, Canvass VAT Rate Retention

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State governors in the country under the aegis of Nigeria Governors’ Forum (NGF) have expressed support for the Federal Government’s ongoing tax reforms in view of the socioeconomic benefits to the country.

The governors, who expressed their support for the fiscal measures on Thursday in a communiqué issued at the end of  ‘The Subnational Consultations and Engagement with The Presidential Tax Reform Committee’ meeting urged the National Assembly’s lawmakers to  pass the Tax Reforms Bills being deliberated upon, subject to some reviews made by during the meeting.

According to the governors, the meeting was convened to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system, and at the end of their deliberations they agreed that the Value Added Tax (VAT) proposed rates should be reviewed in order to benefit all stakeholders.

In the 5-point communiqué signed by the Chairman of the NGF and Governor of Kwara State, AbdulRahman AbdulRazaq, the Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws in view of 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: 50% based on equality, 30% based on derivation, and 20% based on population.

In addition, they 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 and the governors advocated continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and
promote agricultural productivity.

The communiqué reads further: “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”, it added.

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