The Nigeria Governors Forum (NGF) has opposed the proposed increase in Value Added Tax (VAT) from 7.5% to 10%, describing the move as untimely.
The decision was reached during a meeting held in Abuja on Thursday, where the governors also expressed support for the ongoing legislative process of the Tax Reform Bills.
The proposal to raise VAT was first announced by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who stated that the increase is part of a broader plan to address the country’s revenue challenges.
Speaking last year, Oyedele highlighted the need for urgent reforms in tax and revenue systems, citing a fiscal crisis. “The revenue profile of the country is abysmally low. Even if we dedicate our entire revenue to fixing roads, it will still be insufficient,” he said. He explained that the proposal includes increasing VAT to 10% by 2025, with additional phased increments in subsequent years.
At the recent IMF/World Bank Annual Meetings in Washington, D.C., the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, also affirmed the government’s intention to implement the VAT hike as part of broader economic measures.
Despite these proposals, the governors have urged caution, insisting that the timing is unsuitable given the economic realities faced by Nigerians.
