Gombe State’s Commissioner for Finance and Economic Development, Muhammad Magaji, has begged Lagos and Rivers State governments to reconsider its stance on Value Added Tax (VAT) generated across the country.
The two states are pushing a position for states to be able to collect and have control over their Value Added Tax (VAT).
Speaking at the opening of Technical Workshop on development of the Medium-Term Sector Strategy (MTSS) for the state, Magaji said Southern governments should put sentiments aside and become their brother’s keepers in sharing the VAT generated in their respective states.
He also said that at the moment, only three of the 36 states in the country could survive without support from the federal government. The commissioner also averred that saying that states should take whatever resources it has, will start a very dangerous trajectory that will not augur well for the federation called Nigeria.
Magaji said: “The VAT issue will have adverse effects not only on Gombe State but almost all the states of the federation. I was part of the discussion few weeks ago by all commissioners of finance across the country.
“The realisation was that only Lagos, Rivers and, probably, Delta States would be able to pull through without this VAT being administered centrally, and it is our appeal that we all put sentiments behind and work towards a federation that is one, by being our brother’s keepers and ensuring that what is pulled together at the centre is distributed to be able to balance resources across the country.
“Don’t forget that the oil-producing states collect only 13 per cent derivation, so if you say every state will take whatever resources it has, that means we are starting a very dangerous trajectory that will not augur well for the federation called Nigeria.”
This is coming after a Federal High Court sitting in Port Harcourt, Rivers State, dismissed an application by the Federal Inland Revenue Service, FIRS, seeking to stop the state government from commencing collection of Value Added Tax (VAT) in the state.
Lagos house of assembly has also commenced process of passing a law that will allow the state government collect VAT generated in the state.
