BY KENNETH EZE
Corporate governance experts, legal luminaries, political activists, public affairs analysts, tax consultants and financial experts have affirmed that the ongoing dispute on Value Added Tax is laden with a lot of positives, if properly handled.
Many opinion leaders who spoke to The Point in separate interviews said it could weigh-in strongly on peaceful strategic restructuring, corporate governance, the rule of law, leadership capacity, issues-led alliances and strong institutions.
Acting Chief Operations Officer, Institute of Directors Centre for Corporate Governance, Nerus Ekezie, noted that the issue of VAT had serious economic implications.
He counselled that the best interest of the economy should lead in efforts to resolve the matter, and called on relevant authorities to consult extant global best practices and statutes widely, in order to make a careful choice of what to adopt.
“It is imperative to consult existing statutes to ascertain globally applicable and workable VAT administration laws and processes, before deciding on what is best for the country,” Ekezie said.
He pointed out that equity and fairness should also count strongly, so that no section of the country would feel sidelined or cheated.
On constitutionality, former president of the Civil Liberties Organisation, Nigeria, Olisa Agbakoba, commended the Rivers State Governor, Nyesom Wike, for identifying definite constitutional provisions and pushing for their enforcement.
Agbakoba said, “That’s the rule of law because it shows that the Constitution is enforceable. Kudos to the governor who approached the court; kudos to the judiciary and the judge for delivering judgement boldly, according to the law.
“If this goes on all the time, it establishes the parameters of what is right and wrong. That’s how to deepen governance.”
VAT and Rule of Law
Another notable lawyer, Monday Ubani, perceived the matter as a perfect opportunity for the Judiciary to interpret the Constitution.
Ubani recalled that since 1999, the judiciary had stepped in whenever called upon, to adjudicate on several contentions to strengthen civil rule.
He cited the issues of physical planning and creation of local governments for which Lagos State approached the Supreme Court and got results.
In the matter of local government creation, Ubani noted, the apex court ruled that states had power to create but that such creations required the National Assembly’s approval to be recognised by the Constitution as local governments.
“Kudos to the governor who approached the court; kudos to the judiciary and the judge for delivering judgement boldly according to the law”
He noted that based on that ruling, several states created development authorities, thereby serving the purpose of taking governance and development closer to citizens, exactly as local governments would.
The contention about physical planning was also resolved by the judiciary, he observed.
The problem with Nigeria, according to him, “is that we often don’t know the difference between right and wrong.”
Agreeing with Agbakoba, Ubani said VAT was just another area that required judicial intervention.
Many informed Nigerians told The Point that many judicial precedents assured that justice would be served on the instant case.
VAT and true federalism
Lawyers contend that developments on this issue would encourage more parties who feel aggrieved to approach the courts for redress, which would further strengthen true federalism in Nigeria.
Agbakoba opined that by bringing politicians across different political parties together, the matter might deepen democracy and enthrone true federalism in Nigeria.
“It means that people are beginning to see in-between the lines and people are no longer blinded by mere affiliations, either ethnic or political. People are influenced by what is right. And that is why you notice this alignment between Rivers (PDP) and Lagos (APC). Two states on different sides of the political divide, yet understand the need to work together for common good,” he noted.
Pleased with political leaders rising above partisanship, he said the larger issue was that the aggressive argument about restructuring seemed to have accelerated easily with the matter filed by Governor Wike “because the crux of Governor Wike’s case is that the Federal Government has too many powers on VAT.”
He identified VAT as an important item on the restructuring agenda, which all should be pleased to see equitably resolved.
“Should the Supreme Court rule in favour of Governor Wike, that would restructure one element of power in the Constitution,” Agbakoba observed.
According to him, there are many other ongoing legal actions, which might impact the restructuring discourse.
He cited the matter to determine who had responsibility for funding the courts, between the federal and state governments as an example.
“Soon, governors would be studying the constitution to see whether they can get more money from the federal purse,” he noted.
On his part, Ubani stressed the need to use constitutionality to deepen democracy with the instrument of public interest litigation, which he believed would address some imbalances in governance, and address misgovernance.
“This is what the Rivers State Government has started with the VAT issue, which other states in the South have indicated interest in. Other states in the North are also indicating interest to support the Federal Government,” he observed.
He noted that the alliances were not along political lines, but along geographical lines, with the southern states clamouring for fiscal federalism and the northern states objecting to it.
“This particular thing is a public interest litigation that would actually address some of the imbalances in the system, which is a good development,” Ubani maintained.
“Those in the know consider tribal and partisan alliances mere drumbeats in the sophisticated political orchestra likely to redefine fiscal federalism in Nigeria and the President Muhammadu Buhari presidency”
Deepened leadership capacity, cross-party unity
Several analysts commended the leadership capacity demonstrated by Governor Nyesom Wike, for identifying VAT administration as an area that could benefit his state and the tenacity to pursue it in a civil manner.
They also lauded Governor Babajide Sanwo-Olu of Lagos State for looking beyond party affiliations and focusing on what was good for Lagos people, which birthed the alliance between Rivers and Lagos States on the VAT matter.
Recall that since the Federal High Court ruled in favour of Rivers State against the Federal Inland Revenue Service on VAT collection, it had been a nation divided, yet united like never before.
While some alliances are being formed along ethnic and political party lines, the neutrals are delighted that Rivers State (PDP) and Lagos State (APC) appear united on the course.
The governors of both states have matched words with actions by signing VAT Bills into law and appear poised for implementation as soon as the court rules on the matter.
With that ongoing, some power, political and ethnic blocks have thrown their hats in the ring either on the side of Governor Wike and Rivers State or the Federal Inland Revenue Service/Federal Government.
However, those in the know consider tribal and partisan alliances mere drumbeats in the sophisticated political orchestra likely to redefine fiscal federalism in Nigeria and the President Muhammadu Buhari presidency.
Agbakoba noted that the likely impact of the VAT matter as being championed by Governor Wike could make other governors diligently search for constitutional provisions to exploit, which would deepen leadership.
Ubani agreed, saying, “I don’t think that this is being played along political party lines. It is merely a matter of economics, a matter of fiscal federalism, which every state should be interested in.
“We have been clamouring for fiscal federalism. If you remember, the 1963 Constitution gave the various regions the power to generate revenue and remit a certain percentage of that to the Federal Government. We have been clamouring for the states to control the resources within their territories and remit certain percentage to the Federal Government, but the Federal Government has refused.”
However, a multidisciplinary financial expert, Akiode Akinkunle, claimed that the governors of Rivers and Lagos states were merely looking for ways to leverage more money within their controls for the politicians in their states.
“The truth of the matter is that both of them are joining hands together, I think they have a common goal that they want to achieve. And that is, to have another avenue through which they can be getting more public funds,” he said.
Akinkunle, who is very familiar with the operations of the present VAT administration system, pointed out that “the Federal Inland Revenue Service has been the one in charge of VAT for some time and we know.”
The chartered accountant acknowledged that there were loopholes in the Constitution, but added that there were no necessary machineries in each state to collect VAT effectively.
“If we do it in each state, we’ll need much load of manpower, which cannot be guaranteed to match the already tested and proven expertise at the FIRS,” he said.
He wondered how the states still finding it difficult to manage themselves would cope with the complex issue of VAT administration, which the FIRS had not mastered, several years after being saddled with the responsibility.
Likely outcome, reduced agitation for more states
Judicial precedents indicate that the court would adjudicate equitably on the matter. The Supreme Court’s ruling when Lagos State approached it on the creation of local governments and physical planning are veritable examples.
The numerous agitations for state and local government creations are likely to be reconsidered, should the issue of VAT administration take away a chunk of what the Federation Accounts Allocation Committee would be apportioning among the federating units monthly.
Agbakoba shares this view. He also thinks that it would empower the citizens to hold political leaders accountable more than before.
He said, “Our political leaders would now realise that you’ve got to put your money where your mouth is. If you agitate for a state, how do you fund it? Every state would now have to work hard, because we’ll move up to the point where the Federal Government is not going to be distributing money to anybody.
“The state governments’ responsibilities would be clearly defined. So, if you now want to become a governor, you must be sure where you’re going to get the funds to govern.”
If the Supreme Court’s judgement favours Rivers and Lagos, it would also create employment opportunities as each state would then need manpower to administer the VAT.
But in all, analysts agree that all the sides must be well considered to arrive at the best decision for the country.
