NEWS

Govs Back Tax Reform Bills, Propose New Sharing Formula

The 36 state governors under the Nigeria Governors’ Forum (NGF) have met with the Federal Government to deliberate on the Tax Reform Bills sent to the National Assembly by President Bola Tinubu.

Following a meeting on Thursday in Abuja with Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, the governors pledged support for the legislative process required for the passage of the bills, provided their proposals are considered.

Communique Highlights
In a communique issued by NGF Chairman and Kwara State Governor Abdul Rahman Abdul Razaq, the Forum endorsed a revised VAT sharing formula aimed at equitable distribution: 50% based on equality, 30% on derivation, and 20% on population.

The governors resolved against any increase in the VAT rate or a reduction in Corporate Income Tax (CIT) at this time to preserve economic stability. They also advocated for continued VAT exemptions on essential goods and agricultural produce to protect citizens’ welfare and support agricultural productivity.

Additionally, they recommended removing terminal clauses for agencies such as Tertiary Education Trust Fund (TETFUND), National Agency for Science and Engineering Infrastructure (NASENI), and National Information Technology Development Agency (NITDA) in the allocation of development levies under the bills.

The communique read in part: “The Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws.

“Members acknowledged the importance of modernizing the tax system to enhance fiscal stability and align with global best practices.

“The Forum endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources: 50% based on equality, 30% based on derivation, and 20% based on population.

“Members agreed that there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time, to maintain economic stability. The Forum advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.

“The meeting recommended that there should be no terminal clause for TETFUND, NASENI, and NITDA in

the sharing of development levies in the bills.

“The meeting supports the continuation of the legislative process at the National Assembly that will culminate in. the eventual passage of the Tax Reform Bills.”

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