Tax reform bills: Stakeholders reject governors’ proposed VAT sharing formula

Some stakeholders across different states in the country on Friday met in Abuja, where they rejected the proposed VAT sharing formula by state governors in the tax reform bills presented to the National Assembly by President Bola Ahmed Tinubu. Governors of the 36 states of the federation last week met in Abuja, with the Presidential […]

Some stakeholders across different states in the country on Friday met in Abuja, where they rejected the proposed VAT sharing formula by state governors in the tax reform bills presented to the National Assembly by President Bola Ahmed Tinubu.

Governors of the 36 states of the federation last week met in Abuja, with the Presidential Fiscal Policy and Tax Reforms Committee led by Taiwo Oyedele, where they resolved that there should not be VAT increase.

In the communique signed by the Chairman of the Nigeria Governors Forum (NGF) and governor of Kwara State, AbdulRahman AbdulRazaq, the governors said the revised VAT sharing formula must ensure equitable distribution of resources of 50% based on equality, 30% based on derivation, and 20% based on population.

But rising from their meeting in Abuja on Friday, the stakeholders in a communique signed by 47 members and read by Okorie Ikechukwu Raphael, said, “We, the undersigned representatives of the Nigerian populace, driven by our collective aspiration for equity, justice, and economic progress, have gathered to express our unified position on the Tax Reform Bill currently before the National Assembly.

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“We categorically reject the Nigeria Governors Forum’s proposed VAT sharing formula, which allocates 50% based on equity, 30% based on derivation, and 20% based on population.

“This formula does not take into account productivity and economic growth, which are critical factors in determining a state’s contribution to the national economy.

“By ignoring productivity, this formula may inadvertently penalise states that are making concerted efforts to diversify their economies and promote economic growth.

“We urge the National Assembly to reconsider this proposal and adopt a more nuanced approach that rewards productivity and economic growth.”