Following a judgement by a federal high court in Portharcourt, restraining the Federal Inland Revenue Service, FIRS, from collected Value Added Tax, VAT, in the state, Rivers State and Lagos state are set to see a further boom in the revenues!
Businesses henceforth will pay their VAT to the state government and not the federal government through the FIRS.
The new development will however see a sharp decline in the income coming to other states via share of VAT, especially those with low internal business activities.
The Gombe State Commissioner of Finance and Economic Development, Muhammad Magaji, has appealed to Lagos and Rivers state Governemnt to reconsider their decision. In a statement obtained from The Cable, Magaji said;
“The VAT issue will have adverse effects not only on Gombe state but almost all the states of the federation. I was part of the discussion a few weeks ago by all commissioners of finance across the country,” Magaji said.“
“The realisation was that only Lagos, Rivers and probably Delta states would be able to pull through without this VAT being administered centrally, and it is our appeal that we all put sentiments behind and work towards a federation that is one, by being our brothers’ keepers and ensuring that what is pull together at the centre is distributed to be able to balance resources across the country.“
“Don’t forget that the oil-producing states collect only 13 per cent derivation, so if you say every state will take whatever resources it has, that it means we are starting a very dangerous trajectory that will not augur well for the federation called Nigeria.”