Weeks back issues related to Value Added Tax has been the major news content circulating in Nigeria daily newspapers and Online newsrooms, the Federal high Court situated in Port Harcourt passed a judgment in favour of states government on VATcollection. Since then, majority were in support of States government with the opinion of fiscal federalism is inevitable and motive of stop robbing Peter to pay Paul
Days after the judgment some states have expressed their readiness to begin the collection of Value Added Tax in accordance with the judgment of a Federal High Court in Port Harcourt, which ruled that states, and not the Federal Inland Revenue Service, should be collecting VAT and Personal Income Tax
While signing the Valued Added Tax Law No. 4 of 2021 and other bills into law, Governor, Nyesom Wike said, “We (The government of Lagos and Rivers states) have expressed their readiness to begin the collection of Value Added Tax in accordance with the judgment of a Federal High Court in Port Harcourt, which ruled that states, and not the Federal Inland Revenue Service, should be collecting VAT and Personal Income Tax”
In the mood of stop robbing Peter to pay Paul, Governor, Wike said “Let me tell you the injustice in this country. In the month of June 2021, which we shared in July, VAT collected in Rivers State was N15.1billion. What they gave us was N4.7billion. See the gross injustice and this money includes contracts awarded by the Rivers State Government.
“This is not an issue of party, it is the issues of infraction of the constitution, issues of illegality. Look at Lagos, it is not the same party as me. In the month of June 2021, the VAT collected in Lagos was N46.4 billion but see what Lagos got, N9.3 billion! Have you seen the injustice in the country? VAT collected in Kano was N2. 8 billion and they gave them N2.8 billion. Is there any justice in this country?”
As my title implied “In a VAT spirit: Let others breathe the way you want to breathe” this title is to portray Federal, States and Local government administrations in Nigeria. The state government especially Southern States want to breathe under Federal government as they feels the sharing formula among States is cheating because major VAT is from the South and Northern States were the most beneficiary
Nigeria as other Commonwealth country is also operating three tiers of government (Federal, State and Local Government). The current state of Local Government in Nigeria is characterised by unbridled interference of the State Government. In many cases, elected Council Executives are dissolved by State Governments without due process and Caretaker Committee is set up as against the democratically elected council stipulated in the constitution. Successive civilian administrations since 1999 have seriously ignored this constitution provision, thereby making Local Government an appendage of State government.
The channels for distributing council funds have also become a bone of contention. When money is allocated to the councils, it does not go directly to the councils, it is deposited in the State/Local Government Joint Account (JAC). At the JAC meeting, the council is a junior partner.
In May 2020, President Muhammadu Buhari signed the Executive Order, purpose of the order is to to grant financial autonomy to the judiciary, legislature as well as the local government councils, as the third tier of government. Since last year the order has been signed non of the state Governor has allowed any local government chairman to have final say on the monthly allocation
According to the National President of NULGE, Hakeem Ambali, “About nine state governors are diverting and pilfering local government funds, thereby denying the people at the local government level the right to benefit from social amenities that the local government should provide” reported by SaharaReporters in April 17, 2021.
If truly the state governors were in the spirit of restructuring along with true fiscal federalism they should allow the third tier of the government to enjoy there autonomy, What’s good for the goose is good for the gander
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