Nigerian governors have unanimously endorsed President Bola Tinubu's proposed tax reform bills, including a revised Value Added Tax (VAT) sharing formula. This new formula allocates VAT proceeds as follows: *50% on equality basis*, *30% based on derivation*, and *20% based on population*.
The governors' endorsement is a significant breakthrough, as it resolves the controversy surrounding the tax reform bills. The new VAT sharing formula replaces the previous 20% derivation-based model and is seen as a more equitable distribution of resources.
President Tinubu has welcomed the governors' endorsement, praising their "bold leadership and commitment to fostering unity among leaders nationwide". However, not everyone is pleased with the new formula. Senator Ali Ndume has rejected the 30% derivation sharing formula, calling it "too high" and suggesting a reduction to 10-13%.
The tax reform bills aim to promote national interests, improve Nigeria's economic competitiveness, and attract investments. The revised VAT sharing formula is expected to benefit states that generate more revenue, while also ensuring a more equitable distribution of resources across the country.
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