THE State Government has appealed to it’s Lagos and Rivers state counterparts over their decision on the collection of Value Added Tax.
Recall that Governor of Rivers State, Nyesom Wike, had signed a bill on VAT followed by an order requiring businesses to henceforth pay VAT to the state and not to the Federal Inland Revenue Service.
He announced that the payment of VAT to the state will commence this September.
This was after a judgment by a federal high court in Port Harcourt restrained the FIRS from collecting VAT in the state.
The Lagos State government, in line with the judgment, also passed a VAT bill and asked the FIRS to stop collecting VAT from businesses in the state.
This is despite the FIRS insisting that until the court of appeal or supreme court issues a final verdict, it still has the right to collect VAT in states.
Reacting, the Gombe State Commissioner of Finance and Economic Development, Muhammad Magaji, appealed to both states to be their brothers’ keeper by contributing to the centre.
Magaji, who spoke yesterday at the technical workshop organised by the state on the medium-term sector strategy, warned against a trajectory that will not augur well for the federation.
“The VAT issue will have adverse effects not only on Gombe state but almost all the states of the federation. I was part of the discussion a few weeks ago by all commissioners of finance across the country,” Magaji said.
“The realisation was that only Lagos, Rivers and probably Delta states would be able to pull through without this VAT being administered centrally, and it is our appeal that we all put sentiments behind and work towards a federation that is one, by being our brothers’ keepers and ensuring that what is pull together at the centre is distributed to be able to balance resources across the country.
“Don’t forget that the oil-producing states collect only 13 per cent derivation, so if you say every state will take whatever resources it has, that it means we are starting a very dangerous trajectory that will not augur well for the federation called Nigeria.”
