On Friday, January 25, 2025, a group of stakeholders from various states gathered in Abuja to express their opposition to the proposed VAT sharing formula included in the tax reform bills currently before the National Assembly. The formula, presented by the governors, was rejected by the stakeholders for not adequately addressing the issue of economic growth and productivity.
Last week, governors of the 36 states met in Abuja with the Presidential Fiscal Policy and Tax Reforms Committee, led by Taiwo Oyedele, where they reached a consensus to not support an increase in VAT. In the communiqué signed by the Chairman of the Nigeria Governors Forum (NGF) and the Governor of Kwara State, AbdulRahman AbdulRazaq, the governors proposed a revised VAT sharing formula. This formula allocated 50% based on equity, 30% based on derivation, and 20% based on population.
However, on Friday, the stakeholders released their own communiqué, which was signed by 47 members, rejecting the governors’ proposed formula. The communiqué was read by Okorie Ikechukwu Raphael and emphasized that the formula did not account for factors such as productivity and economic growth. The stakeholders argued that by ignoring these factors, the proposed formula could unfairly penalize states making significant efforts to diversify their economies and foster growth.
The stakeholders urged the National Assembly to reconsider the proposed formula and adopt a more balanced approach that rewards states based on their productivity and contributions to the national economy.
