While Nigerians continue to battle the economic hardship and the rising cost of living in the country, the FG rolled out plans to increase the Value Added Tax (VAT) from 7.5% to 10%.
As we speak, this development is still whipping up reactions, notably from the Nigeria Governors’ Forum (NGF).
The governors have opposed the proposed increase.
This fresh episode of drama started on Thursday, January 16.
On that fateful day, a meeting was held in Abuja.
It was after that meeting that the governors made their position known.
The governors emphasised that increasing VAT in the current economic climate would place an additional burden on Nigerians already grappling with rising living costs.
Despite rejecting the VAT hike, the governors expressed their support for the ongoing legislative process for the Tax Reform Bills.
They commended the efforts of the Presidential Fiscal Policy and Tax Reforms Committee in addressing systemic challenges within Nigeria’s tax system.
A State In Crisis
The governors said: “We have significant issues in our tax revenue. We have issues of revenue generally which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.
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“When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, coordination within the federal government and across sub-national.
“The second one was revenue transformation. The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets.
“The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.”