The battle between states and the Federal Inland Revenue Service (FIRS) has taken a new turn as the organised Nigerian Organized Private Sector (OPS) is seeking clarification on who should collect the Value Added Tax (VAT) received by businesses.
The VAT, which was collected for the month of August, 2021, is due to be remitted on September 21 but there is confusion as to the party that should rightly collect the taxes.
Recall that Rivers and Lagos States have been at loggerhead with the FIRS over the collection of VAT; a development that saw Southern Nigerian governors throw weight behind Governor Nyesom Wike and Babajide Sanwo-Olu respectively.
The OPS, which comprise Manufacturers Association of Nigeria (MAN) Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Nigeria Employers Consultative Association (NECA) Nigeria Association of Small-Scale Industries (NASSI) and Nigeria Association of Small and Medium Enterprises (NASME) argued that if the confusion remains, they may be obliged to go to court for clarity and keep the VAT collected in August until appropriate instruction.
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Should the companies get their way, it may have a big impact on the September monthly allocation, which is expected to be given to the 36 states in two weeks.
The concerns for states is even compounded when taken into account that the Nigerian National Petroleum Corporation (NNPC) had earlier announced it will deduct a total sum of N215.32 billion from its remittance to the Federation Account and Allocation Committee (FAAC) in September 2021.
At a joint news conference in Lagos on Friday, the OPS, led by their chairman, Taiwo Adeniyi, said the consequences of the current VAT ‘war’ between the Federal Inland Revenue Service (FIRS) and some state governments, portends grave danger for the business community and the fragile economic recovery being witnessed in Nigeria.
