In a major step towards economic reform, President Bola Tinubu has expressed gratitude to the Nigeria Governors’ Forum (NGF) for endorsing four tax reform bills currently under deliberation in the National Assembly. The move marks a pivotal moment in Tinubu’s push for tax modernization and economic restructuring in Nigeria.
The President’s message of appreciation was conveyed in a statement by Bayo Onanuga, his Special Adviser on Information and Strategy. “President Bola Tinubu expresses his appreciation for the Nigeria Governors’ Forum following their unanimous endorsement of the four Tax Reform Bills currently under consideration by the National Assembly,” the statement read.
A Unified Front for Development
According to Onanuga, the NGF’s decision exemplifies a commitment to unity and progress that transcends regional, ethnic, and political boundaries. The President commended the governors for displaying “bold leadership and a willingness to collaborate for the country’s advancement.”
Tinubu highlighted a recent consultation between the NGF and the Presidential Committee on Tax and Fiscal Policy as a prime example of productive cooperation. Describing the meeting as “commendable,” he emphasized its role in aligning federal and state governments’ economic priorities.
Outdated Tax Laws Under Scrutiny
Tinubu’s administration aims to overhaul Nigeria’s outdated tax laws, which have long been criticized for stifling economic growth and deterring foreign investments. The President stated that the tax reforms are designed to bolster national interests, enhance Nigeria’s economic competitiveness, and attract both local and international investments.
“The dialogue between the NGF and the Presidential Committee on Tax and Fiscal Policy Reform highlights the power of constructive conversation in resolving differences,” the statement read. Tinubu also assured the governors of his administration’s commitment to economic growth, peace, and national stability, underscoring their importance as key partners in nation-building.
Calls for Stakeholder Engagement
In addition to praising the NGF’s support, Tinubu extended an invitation to all stakeholders to contribute ideas for refining the bills. He encouraged engagement with the ongoing legislative process at the National Assembly to ensure the reforms address concerns across all sectors.
“Stakeholders with ideas and suggestions for refining the Tax Bills should actively engage with the ongoing legislative process,” he said.
Revised VAT Sharing Formula
One of the major points agreed upon during the NGF meeting was a revised formula for distributing Value Added Tax (VAT). The new formula allocates 50% based on equality, 30% based on derivation, and 20% based on population. This adjustment, the forum noted, aims to ensure a more equitable distribution of resources among the states.
Protecting Economic Stability
The governors emphasized that maintaining economic stability remains a top priority. They advocated against increasing VAT rates or reducing Corporate Income Tax (CIT) at this time, highlighting the need to safeguard citizens’ welfare and encourage productivity.
“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 NGF stated.
Additionally, the forum stressed the importance of exempting essential goods and agricultural products from VAT to protect the most vulnerable and boost the agricultural sector.
Development Levies and National Agencies
The NGF also discussed the allocation of development levies in the proposed tax reforms. The forum recommended that no terminal clauses should be applied to agencies such as TETFUND, NASENI, and NITDA, ensuring continued funding for critical national initiatives.
Broader Implications
The NGF’s endorsement represents a significant win for Tinubu’s administration, which has faced skepticism over its economic policies. Analysts suggest that this cooperation between the federal and state governments may help accelerate the implementation of policies critical to Nigeria’s recovery and long-term growth.
With the endorsement of the governors and a growing call for stakeholder involvement, Tinubu’s tax reforms are poised to set the stage for a more equitable and competitive economic environment in Nigeria. For now, all eyes remain on the National Assembly as the legislative process continues.