VAT Issues: “Let’s Be Our Brothers’ Keeper” – Gombe Govt Begs Southern States

The Gombe State Government has appealed to Southern State Governments to reconsider their push to keep Value Added Tax (VAT) generated from their states.

Muhammad Magaji, the state’s Commissioner for Finance and Economic Creation, made the appeal at the start of a Technical Workshop on the development of the state’s Medium-Term Sector Strategy (MTSS).

He stated that the other states, particularly those in the Southern region, should set emotions aside and become their brothers’ keepers in sharing the VAT produced in their respective jurisdictions.

The demand came in response to Governors Babajide Sanwo-Olu of Lagos and Nyesom Wike of Rivers taking moves to begin VAT collection in their respective states.

Last month, the court had issued an order restraining FIRS from collecting VAT and personal income tax (PIT) in Rivers and directed the state government to take charge of the collection.

Following the court’s judgement, Wike signed the VAT Law No. 4 of 2021 on August 19.

Speaking at the event, Magaji said with the declining money from the federation account, just three of the country’s 36 states could exist without assistance from the Nigerian government.

“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 few weeks ago by all commissioners of finance across the country.

“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 center is distributed to be able to balance resources across the country,” Magaji said.

According to him, it would be a very bad development that won’t augur well for the country if every state will ask for control of its resources.

He added, “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.”