Northern governors ‘meet’ over VAT

Governors of northern states in Nigeria will reportedly hold an emergency meeting in Kaduna State, on Monday, over the contentious Value Added Tax collection.

TheCornet reports that Rivers and Lagos States are seeking to stop the Federal Inland Revenue Service (FIRS) from collecting VAT on their behalf, as it does other states of the federation. Both states have equally promulgated laws empowering them to collect VAT from businesses operating in their jurisdictions.

Prior, Rivers State had approached a Federal High Court, in Port Harcourt, on the illegality of the FIRS to continue to administer the VAT policy on behalf of states. The state was subsequently favoured in the judgment that has since inspired Lagos and other states similarly seeking to be in control of VAT collectible in their jurisdictions.

Dissatisfied, the FIRS appealed to the Court of Appeal, in Abuja, which ruled that two states should maintain the status quo pending when it fully dispenses with the substantive suit before it.

Similarly, the Supreme Court is expected to interpret the constitution on the issue, following a suit Rivers State filed before it.

However, some governors, mainly from the northern region, have voiced their opposition to states collecting VAT individually. They include Kogi, and Katsina States.

On his part, Ekiti Governor Kayode Fayemi, who is also the chairman of the Nigerian Governors Forum (NGF), said the body is awaiting the Supreme Court ruling to be able to take a position on the constitutional matter. Fayemi said this on Arise television programme last week.

The FIRS traditionally collects VAT revenues across the 36 states of the federation and distributes the same among them. As revealed, Lagos State accounts for more than half of the aggregate VAT revenues, followed by Rivers State. Many states, considered economically unviable, rely on the VAT revenues.


Credit: PUNCH, additional input from TheCornet

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