VAT DISTRIBUTION
EQUALITY OF STATES 50%
DERIVATION. 30%
POPULATION. 20%
Derivation made the Far North to be fighting initially, hope they will not fight again now that it is 30%
Communique Issued At The End Of The Subnational Consultations And Engagement With The Presidential Tax Reform Committee.
We, members of the Nigeria Governors’ Forum (NGF) and
presidential tax reform committee, convened on the 16th of January
2025 to deliberate on critical national issues, including the reform of
Nigeria’s fiscal policies and tax system, and arrived at the following
resolutions:
- 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:
o 50% based on equality,
o 30% based on derivation, and
o 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.
