NGF Endorses Tax Reform, Rejects VAT Hike, CIT Cut
NGF Endorses Tax Reform, Rejects VAT Hike, CIT Cut
The Nigeria Governors’ Forum (NGF) has endorsed a comprehensive reform of the country’s tax system, while rejecting any increase in the Value Added Tax (VAT) rate or reduction in Corporate Income Tax (CIT).
This was contained in a communiqué issued at the end of a joint meeting of the NGF and the Presidential Tax Reform Committee held on Wednesday in Abuja.
The communiqué, released on Friday, stated that the forum reiterated its strong support for the reform of Nigeria’s archaic tax laws.
It noted that the modernization of the tax system was crucial for enhancing fiscal stability and aligning with global best practices.
On revenue sharing, the NGF endorsed a revised VAT sharing formula that allocates 50 percent based on equality, 30 percent based on derivation, and 20 percent based on population.
The forum, however, emphasized that there should be no increase in the VAT rate or reduction in CIT at this time to maintain economic stability.
It also advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
Furthermore, the meeting recommended that there should be no terminal 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) in the sharing of development levies in the bills.
The forum expressed support for the ongoing legislative process at the National Assembly, which will ultimately lead to the passage of the Tax Reform Bills.
