BY TIMOTHY AGBOR, OSOGBO
As the ongoing battle over Value Added Tax continues to rage between the Lagos, River State governments and the federal government, other state governors have been charged to take up the challenge by fighting for their right in the interest of the masses.
A lawyer and policy analyst, Tunji Ogunyemi, made the call recently, alleging that the administration of VAT originally belonged to the states and not the federal government.
On that account, he urged the various state governments to seize the opportunity by taking charge of collection of VAT.
Ogunyemi, who is a lecturer at the Faculty of Arts, Obafemi Awolowo University, Ile-Ife, while speaking in Osogbo, lauded the judiciary for the milestone judgment held in favour of the River State government, describing the development as an evidence of ‘judicial activism’ in the country.
He said that Nigeria was the only country where the federal government collects VAT on behalf of states, adding that “VAT is a genre of the states.”
He supported the argument that the North, which opposed the sale of beer and other alcohol, should not enjoy the tax being derived from the sale of the products in the South.
According to him, the ongoing fight by the states over collection of VAT is a pointer to the fact that restructuring has taken its course.
“With this VAT issue, I agree that Nigeria is restructuring itself bit by bit and I say congratulations to us. The problem is actually the law. The Constitution of the Federal Republic of Nigeria and the administration of Value Added Tax Act are so nebulous and mischievous.
“The federal and state High Courts up to the Court of Appeal have embarked upon what I call ‘judicial activism’ and this is my observation in the last three years. The courts are actually not pleased about the ludicrous nature of the Nigeria federal system and have, therefore, decided to wade-in, in favour of the states and the local government councils.
“The federal government is actually domineering and mischievous in the way it has been behaving since 1972.
“Originally, according to the founding fathers of Nigeria, in the London and Lagos Conferences, tax belonged to the regions and of course, the states are the inheritors of the assets and liabilities of the regions. No single federal system in the world that says taxes actually belong to the federal government.
“Nigeria is the only country where buying and selling of goods in local areas is taxed by the federal government. VAT is a genre of the states. You will be surprised that no single state in the South-East is joining in this struggle. They are waiting for Lagos and Rivers to lead when they can go jointly to institute an action against the federal government to claim that which belonged to them originally.
“It was the military that came and transferred the VAT decree to the federal government. You pay your consumption tax where you consume them, whether it is services or dues so, why should anyone pay VAT to the federal government?
“This fight should not be solo; it should be jointly fought by all the states. I know that some states will suffer because their system is skewed against hard work and merits. If you don’t take beer, you should not enjoy the tax that comes from it. It is injustice that states like Zamfara and Katsina benefit from taxes from breweries and distilleries whereas they destroy bottles and discourage the consumption of beers and other spirits.
“These states should stop being hypocritical. They should be truthful enough to reject money from beer and spirits. Some states claim to hate brothels but take taxes from them.
“The federal government takes 80 per cent of other taxes in Nigeria. It collects on currency, insurance, foreign tax, meteorology, mines and minerals, including oil fields, oil mines, natural gas, transport and visas. Is there any other tax that the federal government is not taking in this country?
“Time has come for the states to stand and defend the fatherland. Ninety-eight percent of the citizens live in the states, they don’t live in the Federal Capital Territory and so they should pay to the state governments,” he said.
