By Nigeria Governors’ Forum Bows to Pressure, Okays Presidential Tax Reforms Bill
The Nigeria Governors’ Forum (NGF) has finally bowed to the pressure of accepting the Tax Reforms Bill introduced by President Bola Ahmed Tinubu, endorsing a revised Value Added Tax (VAT) distribution formula and advocating for comprehensive reforms to ensure fiscal stability and equitable resource allocation.
Following a consultation with the Presidential Tax Reform Committee in Abuja, the NGF, chaired by Kwara State Governor AbdulRahman AbdulRazaq, proposed a new VAT sharing formula: 50% based on equality, 30% on derivation, and 20% on population.
The forum also rejected an increase in the VAT rate and emphasized exemptions for essential goods and agricultural products to protect citizens’ welfare.
The proposed reforms, encapsulated in four tax bills introduced by President Bola Tinubu to the National Assembly in October 2024, have stirred national debate. While southern leaders and lawmakers, including Lagos State Governor Babajide Sanwo-Olu and South-South Senators, support the reforms as progressive, northern governors and lawmakers have voiced opposition, citing potential socioeconomic harm to their region.
The Northern Governors Forum and 73 northern lawmakers have called for the bills to be withdrawn, leading to an indefinite suspension of debates in the House of Representatives.
Concerns center on the bills’ impact on existing revenue-sharing structures and provisions affecting development levies crucial to funding agencies like TETFund.
Stakeholders, including the Academic Staff Union of Universities (ASUU), have expressed fears over the bills’ implications for education funding, warning of dire consequences for public universities.
Conversely, economic experts and groups like the Centre for the Promotion of Private Enterprise have praised the NGF’s proposal as a necessary political consensus to advance the reforms.
The Federal Government, represented by the Minister of Information, Alhaji Muhammed Idris, acknowledged the NGF’s support, emphasizing that the National Assembly will ultimately decide the bills’ fate.
Despite the controversy, the Senate has advanced the bills to a second reading, while public consultations and stakeholder engagements continue nationwide.
The NGF’s resolutions, including their opposition to VAT hikes and support for equitable resource distribution, highlight their commitment to balancing economic reforms with the welfare of citizens as Nigeria navigates its fiscal future.
