President Bola Tinubu has called on the National Assembly to expedite the legislative process regarding the Tax Reform Bills so that Nigeria can swiftly benefit from the reforms.
Bayo Onanuga, Special Adviser to the President on Information and Strategy, disclosed this in a statement on January 17, 2024.
Tinubu also expressed his appreciation to the Nigeria Governors’ Forum (NGF) for their unanimous endorsement of the four Tax Reform Bills currently under consideration by the National Assembly.
Updated Tax Laws is essential for economic growth
- President Tinubu lauded the governors, describing their endorsement as bold leadership and a commitment to fostering unity among leaders nationwide.
- He commended the governors for transcending regional, ethnic, and political barriers in support of Nigeria’s development.
“Thursday’s productive consultation between the Nigeria Governors’ Forum and the Presidential Committee on Tax and Fiscal Policy is a commendable example of cooperation between the Federal and State governments,” the statement read.
- The President extended special commendations to the NGF Chairman, Kwara State Governor AbdulRahman AbdulRazaq, for successfully mobilizing support among his peers for these transformative tax bills.
- He also acknowledged the Progressive Governors Forum, the Northern Governors Forum, and other groups for their bipartisan resolution of controversies surrounding the bills.
Tinubu emphasized that the primary aim of the Tax Reform Bills is “pro-poor.”
The presidency vowed to promote national interests, improve Nigeria’s economic competitiveness, and attract both local and foreign investments through its reforms.
He stressed the need to update the country’s outdated tax laws, describing this as essential to the federal government’s economic agenda.
“The President notes that 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 added.
President Tinubu reaffirmed his commitment to partnering with the governors to promote economic growth, national harmony, peace, and stability.
Finally, Tinubu urged “the National Assembly to expedite the legislative process” for these crucial bills to enable the country to reap the benefits of the reforms swiftly.
He also encouraged stakeholders with ideas or suggestions to engage with the ongoing legislative process.
What You Should Know
On Thursday, the Nigeria Governors’ Forum (NGF) endorsed a revised Value Added Tax (VAT) sharing formula, which they believe will ensure equitable distribution of Nigeria’s resources.
Details of the endorsement were disclosed in a communiqué issued on Thursday and signed by NGF Chairman AbdulRahman AbdulRazaq.
The forum reiterated its strong support for comprehensive tax reform, emphasizing the importance of modernizing Nigeria’s tax system to enhance fiscal stability and align with global best practices.
The NGF endorsed a revised VAT sharing formula as follows:
- 50% based on equality,
- 30% based on derivation, and
- 20% based on population.
The forum also agreed there should be no increase in the VAT rate or reduction in Corporate Income Tax (CIT) at this time.
Backstory
The revised VAT-sharing formula followed deliberations between the NGF and the Presidential Tax Reform Committee. Before this agreement, the Taiwo Oyedele-led committee had proposed the following VAT-sharing formula:
- 60% based on derivation,
- 20% based on equality, and
- 20% based on population.
The committee had also proposed reducing the Company Income Tax (CIT) rate from 30% to 25% over the next two years.
Backstory
However, the Northern Governors’ Forum, chaired by Gombe State Governor Muhammed Inuwa Yahaya, earlier opposed the derivation-based VAT distribution model.
In a communiqué, the forum argued that the proposal undermines the interests of the North and other sub-national regions.
Despite this opposition, President Tinubu encouraged governors and stakeholders to engage in the legislative process.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, also addressed concerns, noting that the current VAT distribution model is unfair not only to Northern states but also to all geopolitical zones.
