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The NGF underscored the urgent need to reform Nigeria’s outdated tax laws. Recognizing the pivotal role of a modern tax framework in ensuring fiscal stability, the Forum emphasized the importance of aligning Nigeria’s tax system with global best practices. This commitment signals a significant shift toward a more efficient and transparent fiscal policy that will foster economic growth and development.

In a landmark decision, the Forum approved a revised Value Added Tax (VAT) sharing formula designed to promote fairness and balance in resource distribution among the states.

The new formula allocates 50% based on equality, 30% based on derivation, and 20% based on population.

This restructuring is expected to bridge the economic disparity between states, ensuring that all regions benefit from national revenue while rewarding states that contribute significantly to VAT generation.

Amid rising concerns over the cost of living and economic pressures, the Forum ruled out any immediate increase in the VAT rate or reduction in the Corporate Income Tax (CIT). This decision aims to maintain economic stability and prevent additional burdens on businesses and citizens.

Furthermore, the Forum advocated for the continued exemption of essential goods and agricultural produce from VAT. This measure is geared towards protecting the welfare of Nigerians, supporting household incomes, and promoting agricultural productivity, an essential pillar of the nation’s economy.

The Forum recommended the removal of any terminal clauses in the allocation of development levies to critical national agencies, namely the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA).

This ensures the uninterrupted funding of education, technological innovation, and infrastructure development, which are vital for Nigeria’s long-term growth.

The NGF expressed strong support for the ongoing legislative processes at the National Assembly aimed at passing the Tax Reform Bills. The Forum highlighted that these bills are crucial to institutionalizing the proposed reforms and creating a sustainable fiscal environment that encourages investment, job creation, and economic expansion.

The resolutions reached by the NGF reflect a strategic approach to achieving inclusive economic growth. By modernizing tax laws, ensuring fair revenue distribution, and protecting citizens from undue tax burdens, the Forum is paving the way for a more resilient and prosperous Nigeria.

Signed: H.E. AbdulRahman AbdulRazaq, Chairman, Nigeria Governors’ Forum & Governor of Kwara State.