RMAFC denies opposing new VAT sharing formula

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) said it recognises that the tax reform is not without its challenges though enough for the Commission to oppose it.

Chairman of the Commission, Dr Mohammed Bello Shehu, at a media briefing in Abuja, yesterday, stated this. He, however, said the RMAFC is not opposed to the reform or any part of it.

Bello said: “We recognise that the tax reform bills are not without their challenges. There are concerns about the potential impact on businesses, individuals, and the broader economy, “but as a responsible commission, we are committed to addressing these concerns through constructive engagement with stakeholders.”

He noted that the commission has been working closely with the National Assembly to provide technical inputs on the proposed tax reform bills.

“Our goal is to ensure that the legislation is robust, effective and aligns with global best practices,” he said. However, a report in some sections of the media alleged that the commission was opposed to the new value-added tax (VAT) sharing formula, which has increased the share of states.

Bello said the report is not only false but also malicious, adding that being part of the entire process that produced the proposed reforms, the commission cannot be opposed to it.

“The bills, for some reasons, have sparked intense debate within the last few weeks, with the contentious issue of VAT allocation and derivation taking the centre stage,” he said. He said it is important to recognise that the RMAFC is a critical stakeholder in Nigeria’s fiscal framework.

“Our mandate is to ensure an equitable revenue-sharing formula among the three tiers of government. We take this responsibility seriously and are committed to providing expert advice to support the government’s fiscal policy objectives.

“All, what we are asking for is that the National Assembly empowers us through one of the bills to allocate VAT revenue in line with our constitutional mandate,” he said.

The RMAFC Chairman said the proposed tax reform bills are a significant step towards integrating untapped revenue sources, enhancing Nigeria’s revenue-to-output ratio and positioning the country favourably among countries with high fiscal performance.

“As a responsible and patriotic institution, the RMAFC has been actively engaged in the reform process. We have drafted a comprehensive memorandum outlining our position, which emphasises adherence to global best practices.

“Our stance aligns seamlessly with the President’s vision for a more equitable and sustainable fiscal framework,” he said.