VAT

By Fola Aiyegbusi

Governor Nyesom Wike of Rivers State, like him or not, can be brutally frank on national issues just like his colleague Governor Rotimi Akeredolu, SAN, of Ondo State. The positions of Governor Wike on fiscal federalism and Governor Akeredolu on open grazing are two major issues on national public discourse that keeps endearing these two governors to the hearts of the people they govern. Read this trending social media quote allegedly made by Governor Wike: 

“You can’t destroy beer in your state in the name of sharia yet share from VAT on beer from other states. It is hypocrisy. Free money has promoted laziness. If you want to be a governor grow your state’s economy. You can’t contribute humongous numbers during elections that can’t translate to tax earnings for your state. If they can vote they should be able to work and pay tax.”  

And can anyone fault the above claim by Governor Wike? Therefore, the title of this article is derived from the emphatic and unequivocal claim by Governor Wike that Rivers money is not for “Abuja people”.  

It is a pure statement of fact. The Rivers State government has done the right thing by approaching a Federal High Court and has subsequently had its prayers to the court granted. The Federal High Court has again dismissed the stay of execution sought by the Federal Inland Revenue Services which makes it legally right therefore for Rivers State to execute the judgement in its kitty.

With this move, Governor Wike becomes the first ever person in government or outside government to have taken the most pragmatic step in contemporary Nigeria towards the realisation of proper fiscal federalism and resource control. It is not surprising that the Lagos State government has followed suit after Rivers.

The Lagos State House of Assembly has just passed a law to have absolute control on the VAT generated from consumption in the state. It is absolutely correct to have done so. Governor Wike does not suffer fools gladly, he is a dogged fighter, bold and brave man.

Therefore, the arrogant, self centered and boastful reaction to the Rivers State court judgement by Governor Bello Masari of Katsina State, as if he owns Nigeria, has met its perfect match in Governor Wike. And he has responded accordingly. Therefore, the matter must be thrashed out once and for all.

If not for the mesmerising love of Abuja, this matter ought to have been in the front burner of public discourse since 1999 when this current democratic dispensation took off with former President Olusegun Obasanjo at the helm of affair. And president Obasanjo and members of the National Assembly from the most affected states of this fiscal injustice must also take slices of the blames.

They were all too carried away with the “love of Abuja”, a fallacious over-emphasised statesmanship, and they forgot to do the needful. President Obasanjo even resented all arguments towards a fiscal restructuring of Nigeria, even political restructuring too, and became vindictive when the Lagos State government created additional local government areas by siezing the monthly revenue allocation for Lagos from the Federation Account despite a Supreme Court judgement against the decision.

The Act establishing the collection of VAT was promulgated to law by the military and it ought to have been reviewed long ago before now to reflect the yearnings of the people and correct a seemingly glaring injustice associated with it. Like Gov Wike has claimed, how come states in the North that have an above age 18 voting population of over five million can not capture a sizeable percentage of this figure in their tax nets? Taxes from VAT comes mostly from consumption of goods and services; so don’t they consume?

ALSO READ: VAT: Ondo Senator accuses Buhari of double standard

Or suffice to say something is fictitiously wrong with the supposed figures that is touted from these states as registered number of voters? The most immoral of it all is the act of sharing proceeds from VAT collections on alcohol for states that have declared that they don’t want alcoholic consumption in their states and keeps destroying the products of alcoholic beverage companies even when their delivery trucks are on ordinary transit through their states to other destinations only for them to receive a sizeable chunk of the generated revenue from the consumption of the same alcoholic beverages consumed in other states? How justifiable and justiciable is it for Rivers to generate N15 billion in VAT only to be given a paltry sum of N4.5 billion as due VAT revenue?

The Federal High Court must have taken this into consideration by granting all the reliefs sought by the Rivers State Government against the Federal Government through their revenue collection agency. The National Assembly members from the aggrieved states like Rivers, Lagos, Delta, Oyo and a host of others should have with one voice championed this cause at the National Assembly by reviewing, examining and amending the Act establishing the collection of VAT.

It ought to have been prioritised all through the successive assemblies since 1999 but for the “mesmerising love of Abuja”. Whether anybody likes it or not, this debate has come to stay in our national political space; the chicken has come home to roost and it will now be extremely difficult for anyone to sweep it under the carpet.

There must be a solution and the best solution is for the Federal Government to respect itself and allow the FIRS to obey the Federal High Court judgement delivered in Rivers State favour.

Suffice to warn, that failure to adhere to this advice may trigger up some other contentious issues on resource control and fiscal restructuring that are yet to rear their head, but can really do if care is not taken, because they are clearly known to all involved in the project Nigeria.

Governor Wike has stirred the hornet’s nest, and history will very rightly remember him as the man who made the move at setting Nigeria’s fiscal restructuring on the correct and justiciable path. Governor Wike has spoken; Rivers money is not Abuja’s money; it shouldn’t be Katsina money either.

Let every state generate and keep all taxes on consumption of goods and services in their respective states and the Federal Government too keeps what it is due to it. It is in total deference and disregard for fiscal federalism that the Minister of Finance, as recorded in the media a while ago, was proposing that the Federal Government takes over revenue made from car licensing number plates from the states.

I am sure this intended policy by the Federal Government will be Governor Wike’s next fiscal restructuring issue to be addressed. On all of this Governor Wike has put the round peg in a round hole.

*Aiyegbusi, a commentator on national issues, wrote via: [email protected]

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