The 36 governors of Nigeria, under the umbrella of the Nigeria Governors Forum, have proposed a new tax-sharing formula to address members’ concerns about President Bola Tinubu’s tax reform bills.
In their communique on Thursday, January 16, following their meeting with the tax reform committee in Abuja, the governors unanimously opposed an increase in the Value Added Tax (VAT) rate.
The governors emphasized the need to maintain economic stability and safeguard citizens’ welfare during President Tinubu’s economic reforms, explaining their rejection of an increase in VAT.
Speaking on the inequalities in resource allocation, the forum approved a new VAT sharing formula, which indicated 50 percent based on equality, 30 percent based on derivation, and 20 percent based on population.
According to Abdulrahman Abdulrasaq, the chairman of the forum and governor of Kwara state, the revised formula would promote balance and fairness in resource distribution across the country. It addressed the needs of smaller states and incentivised revenue generation at the subnational level.
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The governors cited the potential impact on consumers and businesses in their firm objection to the increase in VAT rates.
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Source: Henzodaily.ng