The northern governors have said that if every state of the federation follows the Lagos and Rivers example in the Value Added Tax, VAT, controversy, there would be multiple taxation, rise in prices of goods and services and collapse of inter-state trade.
They were also of the opinion that the said states were mistaking sales tax for VAT.
Vanguard had reported that the governors, on the platform of Northern Governors Forum, NGF, met in Kaduna to deliberate on, among others, issues bordering on insecurity and the VAT controversy.
They took their stand on the issues in a communique released after the meeting.
On VAT, the governors held that “Rivers and Lagos states enacted their own VAT laws and the Southern Governors Forum have expressed support for this course of action.
“VAT is being confused by these state governments as a sales tax.
“If every State enacted its own VAT Law, multiple taxation will result in increases of prices of goods and services and collapsed in interstate trade.
“VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.”
On why Lagos accounts for a huge chunk of VAT, the northern governors said: “Lagos accounts for our 50% VAT collection because most of the telecommunication companies, banks, manufacturing and other trading activities have their headquarters in Lagos, with the resultant and wrongful attribution of VAT.”
They decide that “Until and unless the Supreme Court pronounces judgement on the substantive matter between Rivers State and Federal Government, the matter is sub judice and Northern States Governors Forum would respect this.”