The war for the collection of Value Added Tax (VAT) which Governor Nyesom Wike of Rivers State ignited in the country is currently taking a dangerous dimension on the sidelines. Pan Niger Delta Forum (PANDEF) took a critical look at the opposition of Governor Aminu Masari of Katsina State on the matter, and returned a damning verdict.
Masari is expressing surprise that Rivers and Lagos are seeking to exclude the rest of the country from their VAT proceeds, while they are reliant on population from other parts of the country to sustain their economy.
Apparently piqued, PANDEF described the Katsina governor’s comments as irresponsible. Governor Masari has been lampooning his colleagues agitating for collection of VAT by individual states, describing the move as a joke.
Rivers and Lagos have set plans in motion to collect VAT directly from companies domiciled in their states. But the move by Rivers has been halted by a Court of Appeal. However, the state government has appealed the ruling at the Supreme Court.
At a meeting on Thursday, other governors from the region adopted the position of the two states by endorsing VAT collection at the state level. But Ebonyi State governor, David Umahi, on Friday, denounced the position contained in the communiqué issued by southern governors as he kicked against decentralised VAT collection.
The Katsina governor said, “First of all, this issue is before the Court of Appeal for determination, so I will not comment directly on it, but I will give you a scenario.
“What is Lagos without the rest of Nigeria? The market Lagos is boasting of is dependent on the larger part of the country. Benin Republic has a port, Togo has a port; do they have the population to back up the ports? Without us providing the demand part, what will be Lagos?” Masari said.
He said all states benefitted from each other in the revenue equation and no one should look down on another because of those configurations.
“VAT serves them and us. We provide the bulk of the market because without the rest of the states, what is Lagos or Port Harcourt?
“Any state that thinks it can survive in isolation is joking. We provide the demand that makes Lagos what it is.”
Masari, President Muhammadu Buhari’s governor, however, expressed support for devolution of power to allow states take the lead on issues of security and determine other fiscal issues according to their individual strengths.
The governor said the devolution of power should factor areas of responsibility of states but should be mindful of exclusive roles of the federal government.
“If you devolve, in the real term of devolving, I want to be able to fix the salaries of governors, professionals, civil servants. As a governor, I should not expect to earn as much as the Kano State governor, not to talk of Lagos, because their bases of revenue are not like mine. But that does not take away my authority as governor in Katsina, likewise a councillor in any of our local governments.
“Do you expect me to compare myself with a state that generates over N450billion internally when the best I have is between N12bn and N15bn?”.
However, PANDEF’s National Publicity Secretary, Ken Robinson, is wondering if Masari was also concerned with the business hazards that took place in Lagos and Rivers which he mentioned.
“Did he (Masari) consider the businesses that take place and the business hazards in Lagos and Rivers that had chaotic traffic and the weight on the social amenities in these states? Did he not consider that because of the number of people in these states, there is also a burden on the states to meet the social needs of the people, to meet security needs of the people.
“The truth is that because Nigeria for long has been operating a faulty system, they are used to this faulty system and they are finding it difficult to come to reality that it cannot continue like this forever’’, says PANDEF spokesman.
While stating that PANDEF completely backed states collection of VAT, he stated that “For us the only compromise is to say that the derivation is presently 20 per cent. It should move up to at least 50 per cent.
“A situation where some states generate very little and get billions of naira every month from other states, while the states that are generating so much get reduced sum makes no sense at all. They share our oil money. They take 80 per cent of our oil and give us 13 per cent. They also collect VAT and share it the same way.
“And because of this free money, states have become lazy. They have failed to look internally to generate revenue.”