Nigerian governors have expressed strong support for the Federal Government’s tax reform bills while proposing a new formula for sharing value-added tax (VAT). This decision was reached during a meeting of the Nigeria Governors’ Forum (NGF) and the Presidential Tax Reform Committee held on Thursday.

In a communiqué released after the meeting, the governors emphasized their commitment to overhauling Nigeria’s outdated tax laws. “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 statement read.

As part of their recommendations, the governors proposed a revised VAT-sharing formula designed to ensure fair resource distribution. The new formula allocates 50% based on equality, 30% on derivation, and 20% on population.

Additionally, the governors 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 Forum advocated for the continued exemption of essential goods and agricultural produce from VAT to safeguard the welfare of citizens and promote agricultural productivity,” the communiqué, issued by NGF Chairman and Kwara State Governor Abdul Rahman Abdul Razaq, stated.

The NGF also recommended removing terminal clauses for agencies such as the Tertiary Education Trust Fund (TETFUND), the National Agency for Science and Engineering Infrastructure (NASENI), and the National Information Technology Development Agency (NITDA) in the sharing of development levies outlined in the bills.

Despite the controversies surrounding the tax reform bills, the governors voiced their support for the legislative process currently underway in the National Assembly, aiming for the eventual passage of these reforms. “Members support the continuation of the legislative process at the National Assembly that will culminate in the eventual passage of the Tax Reform Bills,” the communiqué noted.

The tax reform effort began last year when President Bola Tinubu submitted four tax reform bills to the National Assembly. These include the Tax Administration Bill, Nigeria Tax Bill, and Joint Revenue Board Establishment Bill. The proposals also seek to repeal the law establishing the Federal Inland Revenue Service (FIRS) and replace it with the Nigeria Revenue Service.

However, the proposed reforms have faced resistance, particularly from northern governors and leaders, who argue that the bills are unfavorable to the region. Some have gone as far as labeling them “anti-north” and urging the National Assembly to reject them. President Tinubu, however, has remained firm, assuring the public that the bills aim to improve the lives of all Nigerians and are not targeted at any region.

The Presidency has reiterated that the reforms are essential for fostering economic development and ensuring a fairer tax system across the country.

A tense confrontation unfolded in the National Assembly on Thursday during the 2025 budget defense session, as Inspector-General of Police Kayode Egbetokun presented the Nigeria Police budget.

The session became heated when two lawmakers pointed out discrepancies between the IGP’s presentation and the documents previously circulated to them.

Efforts by the committee chairman to allow the IGP to continue while resolving the concerns sparked strong resistance, leading to a loud exchange. The disagreement escalated, culminating in one senator walking out in protest.

Calm was eventually restored, and the IGP resumed his presentation. He reiterated his persistent appeal for the Nigeria Police Force (NPF) to be exempted from the restrictive "envelope budget system," arguing that the current framework undermines the Force’s capacity to effectively address national security challenges.

Senator Abdul Ningi, however, countered that the envelope budgeting system “is neither a legal entity nor ratified by the National Assembly and should therefore remain the standard approach.”

Meanwhile, other lawmakers supported the idea of revisiting the police budgeting process, advocating for a transition to a more flexible and needs-based funding model to better address the Force’s operational challenges.