fbpx
skip to Main Content
VAT Controversy: Interview: Steps Taken By The Governor Of Rivers State, Support From His Lagos State Counterpart Is Very Commendable- Ojnimi S. Apeh, Esq

VAT AND THE IMPLICATIONS OF THE STEPS TAKEN BY THE GOVERNOR OF RIVERS STATE AND HOW IT WILL HELP THE BETTERMENT OF A STATE AND NIGERIA.

What is VAT?

It is important to state that I was called upon to express my views on the above subject matter within a very limited time. Be that a as may, I will try to do a summarized justice to it. 

Value Added Tax is a tax assessed at each step in the production of a commodity, based on the value added at each step by difference between the commodity’s production cost and its selling price.

However, in most European countries. See page 1499 of the Black’s Law Dictionary, Eight Edition. In summary, VAT is a tax imposed by the Federal Government on the value which a citizen drives from buying goods and services.

VAT is paid by those who renders goods and services but it is imposed on the Consumer who buys the goods and services when they pay for it. For instance, Supermarkets, Restaurants and other companies who sell goods and offer services pay VAT to the Federal Government from the VAT imposed on the Consumer who purchase the good and services from the Supermarket or Restaurant. VAT is not imposed on those or Companies offering the goods and services. But on the Consumer who purchases the goods and services.

THE STEPS TAKEN BY RIVERS STATE GOVERNMENT, ARE THEY COMMENDABLE?

From the legal point of view, the steps taken by the Governor of Rivers state which is equally gaining support from his Lagos State counterpart is very commendable. It shows that states governors are now waking up to their responsibilities instead of chasing shadows and depending heavily on the Federal Government.

The 1999 Constitution as amended is very clear on the issue of VAT and the Federal Government cannot breach the Constitution which is the foundation upon which Nigeria is being purportedly governed. 

The provisions of Items 58 and 59 of Part 1 of the Second Schedule of the Constitution are very clear and does not include VAT, withholding tax, education tax and technology tax. The Federal Government can only impose and collect in Items 58 and 59 of Part 1 of the Second Schedule of the Constitution to the exclusion of others.

A community reading of the provisions of Items 58 and 59 of Part 1 of the Second Schedule of the Constitution and Item 7 (a) and (b) of Part 11 (Concurrent Legislative List) of the Constitution as amended, the Federal Government cannot delegate the power to collect VAT, withholding tax, education tax and technology tax to any other body or institution than the State Government. 

WHAT ARE THE IMPLICATIONS?

The advantages/ implications of the Judgment of the Federal High Court are too enormous to be mentioned or counted. This is because, it will prevent lazy States Governors from depending heavily on the Federal Government. These States will start thinking outside the box on how to generate tax and run the states. 

Thank you sir.

Chiamaka Judith Alum
Author: Chiamaka Judith Alum

Good Governance and Human Right Advocate, Content Editor and Data Analyst

This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top
error: Content is protected !!