The Citizens Network for Peace and Development in Nigeria has rejected the Nigeria Governors Forum’s proposed Value Added Tax, VAT, sharing formula, which allocates 50 per cent based on equity, 30 percent based on derivation, and 20 per cent based on population.
The group in a communique jointly signed by its National Coordinator, Raphael Okorie, Chijioke Nwachukwu, among others, said the formulae proposed by the governors did not take into account productivity and economic growth, which are critical factors in determining a state’s contribution to the national economy.
Okorie, who read the communique on behalf of the group while addressing a press conference on Friday in Abuja said by shielding low-income earners and small businesses from the tax burden, the Bill will undoubtedly stimulate economic growth, create jobs, and improve living standards.
Okorie stated: “We categorically reject the Nigeria Governors Forum’s proposed VAT sharing formula, which allocates 50 per cent based on equity, 30 percent cent based on derivation, and 20 per cent based on population.”
Given its pro-poor orientation, the group called for accelerated passage of the Tax Reform Bill to ensure the timely implementation and realisaation of its benefits for the most vulnerable segments of the society.
The group noted that when enacted into law, The Tax Reform legislation, would provide opportunity for a fairer redistribution of wealth, allowing the government to prioritise the needs of the underprivileged.
It stressed that the bills would reduce the tax burden on the poor and ensure that funds are available for public services that benefit marginalized communities.
The group noted: “This formula does not take into account productivity and economic growth, which are critical factors in determining a state’s contribution to the national economy.
“By ignoring productivity, this formula may inadvertently penalise states that are making concerted efforts to diversify their economies and promote economic growth.
“We urge the National Assembly to reconsider this proposal and adopt a more nuanced approach that rewards productivity and economic growth.”