FG has accepted the new VAT sharing formula proposed by the Governors.
NewsOnline Nigeria reports that the Federal Government through the Presidential Tax Committee says it has no objection to the new “equitable” sharing formula for Value Added Tax (VAT) as proposed by the state governors.
This position was made known by the chairman of the presidential committee, Taiwo Oyedele, on Saturday.
Speaking as a guest on The Platform, an event organized by The Covenant Nation, Oyedele said arriving at a conclusion regarding such reforms anywhere in the world, needs to factor in technical inputs as well as political considerations.
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Recall that state governors had earlier rejected the VAT-sharing formula of 20 percent based on equality, 60 percent based on derivation, and 20 percent based on population as proposed by the Oyedele-committee.
However, after a meeting with the committee, the governors, under the auspices of the Nigeria Governors’ Forum (NGF), announced a new proposed revised formula of 50 percent based on equality, 30 percent on derivation, and 20 percent based on population.
Speaking on the development, Oyedele told the audience on Saturday that the proposal has been accepted.
“You also need to consider other things, including political considerations, and so once 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 said.
VAT Sharing Formula Will Benefit All Sectors
The chairman of the presidential committee also gave assurances that the VAT-sharing formula will benefit all sectors of the economy.
He urged those still against the proposal to get familiar with the details as recommended by the committee.
“All sectors will be positively impacted, particularly agriculture and manufacturing, as well as industries generally.
“We also have a provision in those tax bills where we call them priority sectors. And there’s a priority sector incentive, you know, power generation, innovation.
“So I’ll say, even if you’re not going to look at everything in that bill, go and find that section where we have those sectors.
“It’s a pointer to you about where the government wants to redirect the incentive regime,” Oyedele added.