The Nigeria Governors’ Forum (NGF) has rejected the proposed increase in Value Added Tax (VAT) from 7.5% to 10%.
The governors expressed their opposition to the move, citing concerns about economic stability and the potential impact on citizens ¹.
Instead, the NGF endorsed a revised VAT sharing formula to ensure equitable distribution of resources.
The proposed formula allocates 50% of VAT revenue based on equality, 30% based on derivation, and 20% based on population.
The governors also emphasized their support for the ongoing legislative process of the Tax Reform Bills, which aim to modernize Nigeria’s tax laws and enhance fiscal stability.
However, they stressed that any reforms should prioritize the welfare of citizens and promote economic growth.
The proposed VAT increase was initially announced by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, in 2024.
The increase was intended to generate additional revenue for the government, but the NGF’s rejection may halt or delay the implementation of the proposal.
