Governors of states in Southern Nigeria, on Thursday, acknowledged the power of the states to collect Value Added Tax (VAT).
In a communiqué signed by Governor Rotimi Akeredolu of Ondo state and Chairman, Southern Governors’ Forum, after the meeting in Enugu on Thursday, the governors argued that “the collection of VAT falls within the powers of the states.”
Last month, the Rivers Division of the Federal High Court declared that the Federal Inland Revenue Service had no constitutional backing for collecting VAT in the state and granted the power to collect the consumption tax to the Rivers government.
Prior to the judgement, Federal Inland Revenue Service collects consumption tax on behalf of the states of the federation and the FCT.
Since the judgement, the Rivers government has set machineries in motion to implement the judgement, much to opposition from the FIRS and many northern states who generate relatively low revenue internally.
Also, Lagos State, the largest earner of VAT in the country, earlier in September took a cue from its southern counterpart and passed its VAT Bill into law.
However, some northern governors have since kicked against the development. Taking sides with the northern governors, David Umahi of Ebonyi opposed the move of states to collect their value-added tax, insisting that the Federal Inland Revenue should take charge of the collection.
On September 10, the Abuja Division of the Court of Appeal ordered the Rivers and Lagos authorities to stop the collection of VAT, pending determination of the application filed by the FIRS.
Governor Babajide Sanwo-Olu’s government, ignoring the appellate court’s directive, vowed to collect VAT in Lagos despite the court order.
Present at the meeting that held in Enugu on Thursday were Ifeanyi Okowa, Delta; Babajide Sanwolu, Lagos; Gboyega Oyetola, Osun; Emmanuel Udom, Akwa Ibom; Nyesom Wike, Rivers; Dapo Abiodun, Ogun; Ifeanyi Ugwuanyi the host governor.
Also present at the meeting was Rauf Olaniyan, Oyo state deputy governor; Bisi Egbeyemi, Ekiti deputy governor; Philip Shuaib, Edo state deputy governor; Ude Okochukwu, Abia state deputy governor; Kelechi Igwe, Ebonyi state deputy governor; and Placid Njoku, Imo state deputy governor.
The communiqué read in full:
The Nigerian Southern Governors’ Forum at its meeting of today, Thursday, 16th September 2021 held in the Government House, Enuqu, Enugu State reviewea tne state or the nation and the progress of implementation of the decisions reached in her previous meetings and further resolved as follows:
Expressed satisfaction with the rate at which the States in the Southern Nigeria are enacting or amending the Anti- Open Grazing Laws which align with the uniform template and aspiration of Southern Governors and encouraged the States that are yet to enact this law to do so expeditiously.
Encouraged the full operationalization of already agreed regional security outfits; which would meet, share intelligence and collaborate, to ensure the security and safety of the region.
Reaffirmed its earlier commitment to Structural and fiscal federalism as resolved at the inaugural meeting of the
Forum held on Tuesday, 11th May, 2021, at Asaba, Delta State and emphasized the need for the Southern States to leverage the legislative competence of their respective State Houses of Assembiy as well as representation in the National assembly to pursue its inclusion in the Nigerian Constitution through the ongoing constitutional amendment.
Following from paragraph 3″ above, the meeting resolved to support the position that the collection of VAT falls within the powers of the States.
Expressed satisfaction with the handling of issues around the Petroleum Industry ACT (PIA) and ownership of Nigerian National Petroleum Corporation (NNPC) by the larger Nigerian Governors’ Forum.
Reiterated their earlier position that the next President of Nigeria must come from the Southern part of Nigeria in line with politics of equity, justice and fairness.
The Forum thanked the host Governor, Rt. Hon. IfeanyiUgwuanyi, and chose Rivers State as the next host for the
Southern Governors’ Forum meeting in November 2021.
Arakunrin Oluwarotimí O. Akeredólu; SAN Governor, Ondo State and Chairman, Southern Governors’ Forum