Northern Governors Support Federal Government On VAT Collection, Reveal What Will Happen If States Start VAT Collection

The Northern State Governors Forum (NSGF) has decided to pitch its tent with the federal government on it’s power to collect Value Added Tax (VAT) through the Federal Inland Revenue Service( FIRS).

The Court of Appeal while ruling on the dispute between the state and the federal government over the collection of VAT had said that the status quo should be maintained.

The Attorney-General of the federal republic of Nigeria and Minister of Justice, Abubakar Salami said at the just concluded United Nations General Assembly Forum in New York that the FIRS will maintain the responsibility of VAT collection.

Showing their support, the chairman of the NSGF Simon Lalong on Monday, September 27 at the end of their forum’s meeting in Kaduna said that VAT was being confused by the southern state governments as sales tax and if every state decides to start collecting VAT there will be an increase in the price of goods and services.

He made the stand known in a communique issued at the end of the meeting of the Northern governors and traditional rulers from the region.

He said in the communique: “the judgment of the Federal High Court calls to question the constitutionality of VAT, withholding tax, education tax, Niger Delta Development Commission (NDDC), National Information Technology Development Agency, 13 per cent derivation, National Economic Development Council and many others currently levied and collected by the Federal Inland Revenue Service (FIRS).

“Rivers and Lagos state governments had enacted their own VAT laws and the Southern Governors’ Forum have expressed support for this course of action.

“VAT is being confused by state government as a sales tax. If every state enacted its own VAT law, multiple taxation will result to increase in prices of goods and services and collapsed inter-state trade.

“VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.”

The communique also said that: “The reason Lagos accounts for our 50 per cent VAT collection is 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.”

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