Nigeria’s 36 state governors have approved a revised Value Added Tax (VAT) sharing formula following negotiations with the Presidential Tax Reform Committee, in a move aimed at promoting fairer revenue distribution.
According to a communique signed by Governor AbdulRahman AbdulRazaq, Chairman of the Nigeria Governors’ Forum (NGF), VAT will now be shared as follows: 50% equally among all states, 30% based on derivation, and 20% according to population.
The governors also threw their weight behind the ongoing tax reform process, including modernising tax laws and aligning with global standards. However, they rejected any immediate increase in VAT or reduction in Corporate Income Tax (CIT), citing the need to maintain economic stability.
They further backed the continued exemption of essential goods and agricultural produce from VAT, and reaffirmed support for development levies benefiting TETFUND, NASENI, and NITDA.
The agreement follows earlier concerns from some northern states and traditional leaders over possible regional imbalance in the reforms.
The NGF urged the National Assembly to fast-track the legislative process for the proposed Tax Reform Bills.
