Southern governors insist states must collect VAT

Bayelsa State Governor Douye Diri (left); Imo State Deputy Governor Placid Njoku; Governors Ifeanyi Ugwuanyi (Enugu); Emmanuel Udom (Akwa Ibom); Kayode Fayemi (Ekiti); Gboyega Oyetola (Osun); Babajide Sanwo-Olu Lagos; Chairman of the Forum/Ondo State Governor Rotimi Akeredolu; Nyesom Wike (Rivers); Dapo Abiodun (Ogun); Ifeanyi Okowa (Delta); Seyi Makinde (Oyo); Deputy Governors Ude Oko Chukwu (Abia); Philips Shuaibu (Edo) and Kelechi Igwe (Ebonyi) after the Southern Governors Forum meeting in Lagos…

State Governors from the Southern Region of Nigeria on Thursday insisted that their states have the right to collect Value Added Tax (VAT).

Specifically, the Governors who met under the aegis of Southern Governors’ Forum, declared that “the collection of VAT falls within the powers of the states.”

They made this declaration at their third meeting in Enugu, Enugu State capital. The meeting was in continuation of the earlier ones held in Delta and Lagos states.

Also, they stressed the need for Houses of Assembly in the region and their National Assembly members to leverage their legislative competence to pursue the inclusion of VAT as falling within the purview of the states in the ongoing constitutional amendment.

The 17 governors, during their Asaba meeting, had called for concerted efforts at tackling the worsening insecurity, while in Lagos, they resolved to enact laws in their respective states against open grazing as well as presidential zoning in 2023 to the South.

In a seven-point communique reached at the meeting, which was signed and read by their chairman and Ondo State Governor Oluwarotimi Akeredolu, the governors reaffirmed their earlier commitment to structural and fiscal federalism.

Besides, they stressed the need for states in the region to leverage on the legislative competence of their respective state houses of Assembly as well as National Assembly to pursue the inclusion of VAT collection by states in the ongoing constitutional amendment.

The communique expressed satisfaction with the rate at which the States in the Southern Nigeria are enacting or amending the anti- Open grazing laws.

They said enacting or amending the anti open grazing laws aligned with the uniform template and aspiration of Southern Governors and encouraged the states that are yet to enact the law to do so expeditiously.

Thir position tallies with that of Rivers and Lagos State Governors Nyesom Wike and Babajide Sanwo-Olu, who have moved to collect VAT in their respective states based on the order of a Port Harcourt court which had declared Rivers State as the legal entity to collect VAT.

Particularly, last month, the Rivers Division of the Federal High Court declared that the Federal Inland Revenue Service had no constitutional backing for collecting VAT in the state and granted the power to collect the consumption tax to the Rivers government.

Prior to the judgement, Federal Inland Revenue Service collects consumption tax on behalf of the states of the federation and the FCT.

Since the judgement, the Rivers government has set machineries in motion to implement the judgement, much to opposition from the FIRS and many northern states who generate relatively low revenue internally.

Also, Lagos State, the largest earner of VAT in the country, earlier in September took a cue from its southern counterpart and passed its VAT Bill into law.

However, some northern governors have since kicked against the development. Taking sides with the northern governors, David Umahi of Ebonyi opposed the move of states to collect their value-added tax, insisting that the Federal Inland Revenue should take charge of the collection.

On September 10, the Abuja Division of the Court of Appeal ordered the Rivers and Lagos authorities to stop the collection of VAT, pending determination of the application filed by the FIRS.

But Governor Babajide Sanwo-Olu’s government, ignoring the appellate court’s directive, vowed to collect VAT in Lagos despite the court order.

Present at the meeting that held in Enugu on Thursday were Ifeanyi Okowa, Delta, Babajide Sanwolu, Lagos, Gbega Oyetola, Osun, Emmanuel Udom, Akwa Ibom, Nyesom Wike, Rivers, Dapo Abiodun, Ogun Ifeanyi Ugwuanyi the host governor .

Also present at the meeting were Rauf Olaniyan, Oyo State deputy governor, Bisi Egbeyemi, Ekiti deputy governor , Philip Shuaib, Edo state deputy governor , Ude Okochukwu, Abia state deputy governor , Kelechi Igwe, Ebonyi state deputy governor and Placid Njoku, Imo state deputy governor.

Following is the communiqué read in full: