Breaking: Nigeria Governors’ Forum opposes VAT hike, backs Tinubu’s tax reforms

The Nigeria Governors’ Forum (NGF) has firmly opposed the Federal Government’s proposed increase in Value Added Tax (VAT), describing the move as ill-timed.

The governors made their stance clear in a communique released after their meeting held in Abuja on Thursday.

According to the NGF, while they support President Bola Tinubu’s Tax Reform Bills, which aim to streamline and enhance Nigeria’s revenue system, the timing of a VAT increase is not appropriate given the current economic challenges faced by Nigerians.

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.”