Nigeria Governors’ Forum Opposes VAT Hike, Endorses Revised Sharing Formula

The Nigeria Governors’ Forum (NGF) has firmly opposed any move to increase the Value Added Tax (VAT) rate, describing such a proposal as ill-timed.  

In a communiqué issued after their meeting in Abuja on Thursday, the governors expressed support for the ongoing legislative review of the Tax Reform Bills but stressed the need for caution in implementing tax adjustments.  

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, had previously proposed raising VAT from the current 7.5% to 10%, submitting the recommendation to the National Assembly last year.  

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However, the governors maintained that neither an increase in VAT nor a reduction in Corporate Income Tax should be considered at this juncture, citing concerns over economic stability.  

The NGF also backed a revised VAT sharing formula to ensure fairer distribution of revenue among states. Under the proposed formula, 50% of VAT proceeds would be allocated equally among states, 30% based on derivation, and 20% according to population.