- Endorse revised VAT sharing formula
- Advocate continued exemption of essential goods, agricultural produce from VAT
The Nigeria Governors’ Forum has finally thrown its weight behind the proposed tax reform bills currently at the National Assembly.
In a statement on Thursday, the group proposed an “equitable” sharing formula for value-added tax.
The statement was signed by the Chairman, Nigeria Governors’ Forum and Governor of Kwara State, AbdulRahman AbdulRazaq.
The development was an outcome of a meeting between the NGF and the presidential tax reform committee, convened on Thursday to deliberate on critical national issues, including the reform of Nigeria’s fiscal policies and tax system.
According to the statement, the governors recommended that there should be no terminal clause for TETFUND, National Agency for Science and Engineering Infrastructure, and National Information Technology Development Agency in the sharing of development levies in the bills.
They also supported the continuation of the legislative process at the National Assembly that will culminate in the eventual passage of the tax reform bills.
“The Forum reiterated its strong support for the comprehensive reform of Nigeria’s archaic tax laws. Members acknowledged the importance of modernizing the tax system to enhance fiscal stability and align with global best practices.
“The Forum endorsed a revised Value Added Tax (VAT) sharing formula to ensure equitable distribution of resources: 50% based on equality, 30% based on derivation, and 20% based on population.
“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 statement reads.
The group advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity.
On October 13, 2024, President Bola Tinubu asked the national assembly to consider and pass four tax reform bills.
The proposed legislations are the Nigeria tax bill, tax administration bill, and joint revenue board establishment bill.
The president is also seeking to repeal the law establishing the Federal Inland Revenue Service and replace it with the Nigeria Revenue Service.
However, the northern governors urged the National Assembly to reject any legislation that may harm the region’s interests, calling for equitable and fair implementation of national policies and programmes to prevent marginalisation of any geopolitical zone.
The presidency, on October 31, 2024, assured the northern governors that the proposed laws were not recommended by Tinubu to disadvantage any part of the country as they were designed to improve the lives of Nigerians and optimise existing tax frameworks.
NASS threatens to deny allocations to agencies over budget defence
Meanwhile, the National Assembly Joint Committee on Agricultural Production and Services has threatened to deny allocations in the 2025 budget proposal to agencies under the supervision of the Federal Ministry of Agriculture and Food Security whose heads fail to give an account of their 2024 budget performance and projections in the New Year.
The Committee issued the warning on Thursday in Abuja in the continuation of the defence of the 2025 budget estimates by Ministries, Department and Agencies.
This is even as the panel maintained its stands that agencies which fail to be represented by their respective chief accounting officers would not be allowed to make their presentations.
The Chairman of the Senate Committee on Agricultural Production and Services, Saliu Mustapha and his House of Representatives counterpart, Bello Kaoje expressed disappointment that despite the directive of the President for all heads of agencies to appear before the National Assembly to defend their budget estimates; many of them still prefer to send their subordinates.
Their anger followed the absence of the Director General of the Nigerian Agricultural Quarantine Service, Vincent Isegbe who was listed to brief the committee of the performance of his agency in the 2024 budget and projections in 2025.
Senator Mustapha told the representative of the Director General that there was no reason for the Chief Executive who is the accounting officer of the agency to be absent and directed that he appear on Monday, January 20.
He said “We are not going to attend to you. When the President came to present this budget, he made it clear that all heads of agencies must come to defend their estimates and should therefore call off any plan to travel. We are going to give him another time, but that may not be too convenient for him because we have a time frame to submit our report.
“We should all make this thing easy for ourselves. There is no need for us to drag what we don’t need to drag. Even if he is coming to make an excuse, he should have been here to say these are the people that will do this thing on my behalf.
“The President made it very clear that nobody should travel when he came to present the budget. Why is it now that your principal chose to travel? Tell him that we are available tomorrow.”
Addressing the gathering earlier, Senator Mustapha said the projections by the World Food Programme that about 33.1m Nigerians will be hit by acute hunger in 2025 is a clear indication that food security is a task that must be accomplished.
He said “The projection by the World Food Programme that about 33.1m Nigerians will face food insecurity in 2025 is an indication that food crisis is what we cannot allow to happen and we collectively need to avert.
“Given the critical role that agriculture plays in ensuring food security, economic stability and rural development, it is important that adequate budgetary provisions be made to address the challenges the sector faces today.
“The combined effect of climate change, desertification and other environmental challenges put agricultural productivity under severe threat necessitating improved budgetary allocation to the sector”.
On his part, Kaoje said food security is one of the challenges facing the country today, leading to the president declaring a state of emergency on food security in 2024.
He said “Sometime last year, Mr President declared a state of emergency on food security. We have had a robust discussion with the Minister of Agriculture who enumerated a lot of challenges before us and we assured him that the two committees will do something to make sure that the budget is enhanced.
“We will do everything possible to ensure that where you have challenges, we can assist. We will put our heads together with the appropriation committee to make sure that the renewed hope agenda of the President is achieved in the area of food security.”
Meanwhile, the Director General, National Agricultural Seed Council, Ishiak Khalid told the committee that only a paltry percentage of the agency’s capital allocation in 2024 was released.
He said, “We had a very tough time in 2024. Only 9 percent of our total 2024 capital allocation and over 90 per cent are still being withheld. This has made it very difficult to cope with our mandate because, without quality seeds, it is difficult to have good yields.”
Asked if the council can partner with development partners to meet some of its funding needs, the NASC boss said, “We have development partners but they don’t give us funding directly. What they do is that if they have a programme they want us to participate in, they send us flight tickets, book hotel accommodation and all that.”
On his part, the Executive Secretary, Nigerian Agriculture Development Fund, Muhammed Ibrahim decried the agency’s lack of adequate manpower, more than a year after assuming office.
He said, “Unlike the Seed Council, we had zero release in our capital allocation in 2024. But that is not all. About 15 months after we assumed office, we are yet to have a salary scale. Most of our staff members are contracted while some are deployed from other agencies of government.”
The Joint Committee pledged to assist the agency not only to get an adequate allocation in the 2025 budget but also to help in the manpower gap to enable it to discharge its responsibility to the public.
