The debate trailing the collection of the Value Added Tax (VAT) is one of those issues every Nigerian is interested in, and would like to know how it would end in the coming weeks and months. The matter currently in Court, has attracted comments, almost from every quarters in the country, and may have opened the eyes of many Nigerians from what was hidden from the common man in the society, for many years by the political class. The umpire on this issue, the Federal Inland Revenue Service (FIRS), an agency of government, equally is not leaving any stone unturned, and therefore, has approached the National Assembly to amend the law that empowered states to oversee the collection of VAT.
This issue now raging, can be compared with that of the electoral bill that also generated heated arguments, but at the end, the hope of many Nigerians were dashed simply because the president, who came with the ”change mantra” failed to assent to the bill expected to build confidence and transparency in the electoral system. This left many to wonder, whether the much touted 2023 general elections, which the build-up is gradually starting, would be fair and credible. Today, the Federal High Court in Abuja has asked Rivers and Lagos States, to stay executions on the VAT imbroglio, pending the final determination of the case. The Rivers State Governor, Nyisom Wike’s argument is that VAT is not in item 58 or 59 on second schedule of the 1999 Constitution nor in the Concurrent List, but instead in the Residual List, which is within the purview of the state, to collect. He therefore asked the Federal government to hands off completely from VAT collections, from his state.
Although the issue of VAT did not start from Rivers State alone, it all started according to Governor Wike, when Lagos challenged it in the Supreme Court, having sued the Federal Government instead of the agency that is in charge, as stated by the Apex Court. “The issue of VAT did not start from Rivers State alone. It started in Lagos State, when the state (Lagos) challenged it (VAT) in the Supreme Court. Unfortunately, the Apex Court said, ‘look you shouldn’t have sued the Federal Government, what you should have done was to sue the agency.’ We (Rivers) came up to sue the agency that you are not entitled to VAT. And it looks like we are doing something to cause crisis in the country, shamelessly, to some states, who believe they would only at the end of the month, go to Abuja, to collect whatever is in the Federal pool” While this matter is on, already in court, the Federal Government is making moves, as a way of punishment, to exclude Rivers, as one of the states that would benefit from the World Bank loan.
The country for all we care is a democratic government, which in principle and practice should allow every shades of opinion. That the Rivers and Lagos States headed for the court, to test their grounds on the VAT issue is what is expected in a democracy, since our system is not unitary. Whether the court rules in their favour or not, the message today is an open secret that some states in Nigeria go to sleep, while others are working. Arm twisting those who spoke out on this issue may not solve the problem, rather this development should be seen as a wakeup call, for those states that refused to work all these years, but prefer going to Abuja to collect from the Federal pool what they did not work for. Denying Rivers State from benefitting from the World Bank loan because the state has a case against the Federal Inland Revenue Service (FIRS), which is still subsisting in court, should not be contemplated at all, if we are indeed in a democracy.
But instead, we want the Federal government to put states that are not doing enough to increase their Internally Generated Revenues (IGR), on their toes because democracy encourages healthy competition, amongst states of the federating units, and not the other way round. More IGR generation by the states, obviously would reduce the pressure of borrowing by the Federal government, and give room for repayments of these loans that are staggering, and may have mortgaged the future of the country, for so many years to come
