VAT COLLECTION BILL

Rivers makes history as Governor signs landmark VAT collection bill into law: FIRS set for showdown

The Rivers State Governor, Mr. Nyesom Wike signs into law bills on Value Added Tax (VAT) collection. It’s named the Valued Added Tax Law No. 4 of 2021

The governor speaks shortly after signing the bills into law at the Government House, Port Harcourt, says that the judgment of the Federal High Court sitting in Port Harcourt had sufficiently addressed the illegality perpetrated by the Federal Inland Revenue Services (FIRS) on behalf of the Federal Government in the collection of VAT in States.

The signed bill was recently passed by the Rivers State House of Assembly.

Governor Wike says when agencies of the federal government are allowed to illegally demand and collect taxes meant for the state government to collect, they strangulate the state financially and turn them to be beggars.

He said: “But we (Rivers State) are standing on the part of history as representatives of the state to have taken the bull by the horn to challenge the illegality of the Federal Government through the Federal inland Revenue Services (FIRS).

“Of course, we are all aware that the states have already been strangulated. Most states depend on allocation from the federation account. States have been turned to beggars. Hardly will any day pass that you won’t see one state or the other going to Abuja to beg for one fund or the other.”

He said no campaign of calumny or blackmail on the part of Federal Inland Revenue Service (FIRS) would make what is illegal become legal. He dismissed the FIRS’s propaganda that 30 states will suffer if some states are allowed to collect VAT.

Wike pointed out that his concern is on establishing whose duty it is to collect VAT and the constitutionality of such position before talking about who is going to suffer or not.

He said: “In this Rivers State, we awarded contract to companies and within the last month, we paid over N30billion to the contractors and 7.5% will now be deducted from that and to be given to FIRS.

“Now, look at 7.5 per cent of N30 billion of contracts we awarded to companies in Rivers State, you will be talking about almost N3billion only from that source. Now, at the end of the month, Rivers State government has never received more than N2 billion from VAT. So, I have contributed more through the award of contract and you are giving me less. What’s the justification for it?”

The governor said that there are plans already for FIRS to introduce Road Tax and this is likely to take away more duties from the states, and further emasculate them financially.

“Which are the roads? Are they the roads the state government is paying for or the roads federal government has constructed? So, at the end of the day, they have taken over the functions of the state government and the state is left with nothing.”

The governor regretted that the state governments have been so emasculated that they could barely survive without monthly revenue received from Federation Accounts Allocation Committee (FAAC).

He stressed that the overbearing attitude of the federal government, impinged on attaining financial autonomy for the legislature and the judiciary since the states were not allowed to collect due revenues as specified by the country’s constitution.

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9 COMMENTS

    • He is one of the best performing Governors in Nigeria if not the best.what he has done in 6 years is more than what Odili and Amaechi did in 16 years.very practical and passionate about The welfare of his people.

  1. Until these states begin to look at other means of raising funds outside the regular taxation,they will be wasting precious time.Even on that VAT,in A month,how many state in Nigeria can generate up to 100 Million through VAT?Can we get up to 7?by the time to now fully take over the collection of the VAT revenue in their states,will that solve their problems?

    Secondly,he said some states have become beggers,who made them to be beggars?The Constitution has empowered them to make and generate money,if they decide to do Nothing,no Problem.

    Much has been said about how states can increase their IGR outside the regular taxation but it seems that option is the only one we love and Mineral resorces,No problem.it is well with us.

  2. Good as it look, but poorer state will suffer for it…just about 6 states in the federation are self sufficient…other will suffer shortage of revenue sharing from VAT, such as our dear Ekiti State…but in all, it is good in that poorer state will have to shore up their revenue drives internally…

  3. Can’t be happier for states. Whichever VAT generated in your state should be yours!.
    Next level is solid minerals in respective states

  4. Of course.. and I hope other states follow through.. the FG and it Bullies ministers and agencies must be legally reigned in.. now, states will get serious about consumption Tax..

  5. This is the best news in recent times. I sincerely hope all the other states will drag FIRS to Court and claim what’s rightfully theirs! Kudos Governor Wike!

    • It is part of proposed case study to be treated under Value Added Tax in which statutorily collected by the Federal Government but without benefits to where it collected. State government also believe that, it belongs to them. This write-up is beneficial.

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