Governors to Nigerian Government: No to VAT Increase

The Nigeria Governors’ Forum (NGF) has voiced strong opposition to any plans to increase the Value Added Tax (VAT) rate, stressing the need for reforms that safeguard economic stability and prioritize the welfare of Nigerians.

During a meeting with the Presidential Tax Reform Committee on Thursday, the governors discussed the country’s fiscal policies and outlined their concerns about proposals that could exacerbate existing economic challenges.

In a statement signed by NGF Chairman and Governor of Kwara State, AbdulRahman AbdulRazaq, the forum emphasized its commitment to comprehensive tax reform.

However, they cautioned against measures such as raising VAT or reducing Corporate Income Tax (CIT), which they believe could have destabilizing effects.

The governors also underscored the importance of continuing to exempt essential goods and agricultural products from VAT to protect citizens’ livelihoods and boost agricultural productivity.

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A critical point raised during the discussions was the need for a revised VAT-sharing formula. The governors proposed a model that ensures a fairer distribution of resources across states by balancing equality, derivation, and population considerations.

Additionally, they recommended removing terminal clauses for agencies like the Tertiary Education Trust Fund (TETFUND) and the National Information Technology Development Agency (NITDA) to secure consistent funding for critical national development initiatives.

While expressing their support for the legislative efforts underway in the National Assembly to finalize the Tax Reform Bills, the governors stressed the importance of balancing fiscal reforms with social equity. AbdulRazaq noted that these reforms must reflect fairness and protect the most vulnerable, particularly given the current economic climate.

The NGF’s position highlights the need for a careful approach to tax reforms, aiming to achieve economic stability while ensuring that policies are equitable and considerate of the country’s socio-economic realities. Their proposals seek to foster a tax system that supports sustainable growth and a fair distribution of resources, ultimately placing the welfare of Nigerians at the forefront.