Home News VAT collection row: Lagos, Adamawa, Akwa Ibom back Wike 

VAT collection row: Lagos, Adamawa, Akwa Ibom back Wike 

by Our Reporter
The Akwa Ibom and Adamawa state governments on Tuesday aligned themselves with the move by the Rivers State Governor, Nyesom Wike, to stop the Federal Government from collecting Value Added Tax.
The Director-General, Media and Communications, Adamawa State Government, Solomon Kumangar, in an interview with our correspondent in Yola, the state capital, said that the collection of VAT by the states was the only way of reducing their dependence  on federal allocations.

The Akwa Ibom House of Assembly, on its part, said it would soon begin work on a bill that would enable the state to collect VAT.

Similarly, Lagos said it would go ahead with the VAT bill, which passed second reading in the state House of Assembly on Monday.

But the governments of Ekiti, Osun and Benue states said they were still studying the situation before making any move.

The Federal High Court sitting in Port Harcourt in its judgment last month in a suit marked FHC/PH/CS/149/2020 held that the Rivers State Government had the powers to collect VAT within its territory.

The Federal Inland Revenue Service, on Monday, prayed the court to stay execution on the judgment.

But the presiding judge, Justice Stephem Pam, rejected the application, saying granting it would negate the principle of equity.

On Monday, the Lagos State Government toed the path of Rivers State as a bill to empower it to collect VAT scaled second reading in the state House of Assembly.

VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 per cent.

On Tuesday, the Adamawa State Government told our correspondent that the judgment was of interest to it.

Kumangar said the state government might seek to be joined in the Rivers State versus the FIRS VAT suit as an interested party.

He said Adamawa State, which is heavily reliant on federal allocations and overstretched by the impact of COVID-19 and post-insurgency recovery demands of rebuilding, saw the development in Rivers State as one of particular interest to it.

Adamawa State, according to him, welcomes the court ruling as another avenue for states struggling with financial problems to utilise, extend and improve their internally generated revenues.

Kumangar stated, “Anything to extend and improve on our IGR is welcomed. So, we are keen on joining the River State Government should the Federal Government appeal the judgment, which granted Rivers State the right to collect VAT in its domain.

“Whatever will bring improvement to the IGR is a welcome idea for an insurgency ravaged state like Adamawa. The truth is that the collection of VAT by the states is the only way to assist the states, which are heavily dependent on federal allocations, to be able to wean themselves and meet their financial obligations to the citizens. So, if there are areas where revenues can be exploited and extended, surely the state government will welcome it. Surely it’s a case of interest to us and we would like to be joined.”

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