“We have no objection to Govs.’ proposed VAT-sharing formula” – Oyedele 

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Chairman of the Presidential Committee on Tax policy and Fiscal reforms, Taiwo Oyedele, says his committee has no objection to the newly-proposed value-added tax (VAT) sharing formula by the Nigeria Governors’ Forum, (NGF).

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Oyedele stated this yesterday, during an event organised by ‘The Covenant Nation’, to facilitate national development.

Recall that on January 16, the NGF backed the proposed tax reform Bills currently at the 10th National Assembly. The NGF also proposed a new “equitable” sharing formula for VAT.

The development was an outcome of a meeting between the NGF and the committee, convened on January 16, to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system.

The Oyedele-led committee had proposed a VAT-sharing formula of 20% based on equality, 60% based on derivation, and 20% based on population. The northern governors however, opposed the VAT formula, saying it was not in favour of their region, hence the National Assembly should reject it.

However, after the meeting with the presidential committee, the NGF proposed a revised formula of 50% based on equality, 30% on derivation, and 20% based on population.

Addressing the decision of the NGF, Oyedele said reforms anywhere in the world are not just about what is technically correct, as political considerations are also factored in.

“You also need to consider other things, including political considerations and so on. The governors proposed their formula for sharing the VAT revenue. We have no objections to that; because, at the end of the day, if you need to move one kilometre, you don’t have to move all of that at once; you can’t even jump one kilometre at once”.

“Maybe sometimes you need to just move gradually. You know, you take a breather. You reflect, have more data, and then you move again”, he stated. According to him, the proposed VAT-sharing formula will affect all sectors of the economy.

Recall that on October 13, 2024, President Bola Tinubu asked the 10th NASS to consider and pass four tax reform Bills, which are: the Nigeria Tax Bill, Tax Administration Bill, and Joint Revenue Board Establishment Bill. Tinubu is also seeking to repeal the law establishing the Federal Inland Revenue Service (FIRS) and replace it with the Nigeria Revenue Service.

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