Southern Governors are confused on the collection of Value Added Tax (VAT), the Northern States Governors Forum has declared after a joint emergency with traditional rulers of the region.
They said the reason Lagos accounts for over 50 per cent VAT collection was because most of the telecommunication companies, banks, manufacturing and other trading activities have their headquarters in the State with the resultant and wrongful attribution of VAT.
The Northern Governors said though they are constrained by the fact that the VAT matter is subjudice, it was important for them to speak on it to educate the public.
They warned that if every State enacts VAT laws, multiple taxations will lead to increase of prices of goods and services as well as collapse in interstate trade.
In a communique read by the Forum’s Chairman and Plateau Governor Simon Lalong on Monday in Kaduna, the Northern Governors said they will only respect the outcome of judgement on the VAT row from the Supreme Court.
They said: “The Northern State Governors Forum considered the on-going National debate on the collection of Value Added Tax (VAT). As responsible leaders while we are constraint by the fact that the matter is sub judice we however for the purposes of educating the public make the following observations:
“The judgement of the Federal High Court calls to question the constitutionality of VAT, withholding tax, education tax, Niger Delta Development Commission, National Information Technology Development Agency, 13% derivation, National Economic Development Council and many other currently levied and collected by the Federal Government of Nigeria, Federal Inlands Revenue Service.
“Rivers and Lagos State Government had enacted their own VAT laws and the Southern Governors Forum has expressed support for this course of action.
“VAT is being confused by these State Governments as a sales tax. If every State enacted its own VAT Law, multiple taxations will result in increases of prices of goods and services and collapse in interstate trade. VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.
“Another confusion is ignoring observation above and its “overall effect”. The reason Lagos accounts for our 50% Vat collection is because most of the telecommunication companies, Banks, manufacturing and other trading activities have their headquarters in Lagos with the resultant and wrongful attribution of VAT
“Until and unless the Supreme Court pronounces judgement on the substantive matter between Rivers State and Federal Government, the matter is sub judice and Northern States Governors Forum would respect this,” he said.
The Nation
