The Northern Governors have claimed that Lagos state and Rivers state were both confusing Value Added Tax (VAT) for sales tax.
This was noted at a meeting of the Northern Governors Forum held at the Council Chamber Sir Kashim Ibrahim House, Kaduna on Monday.
The meeting was also attended by Chairmen of Northern States Traditional Council led by His Eminence the Sultan of Sokoto.
His Excellency, Rt. Hon. Barr. Simon Bako Lalong, governor of Plateau State who is the Chairman of NGF presided over the meeting which centred on issues of insecurity, VAT among others.
The NGF during the meeting had deliberated on the issue of the VAT, insecurity, among other matters.
Reacting to the move by the Lagos and Rivers governments, the NGF said; “Rivers and Lagos states enacted their own VAT laws and the Southern Governors Forum have expressed support for this course of action.
“VAT is being confused by these state governments as a sales tax.
“If every state enacted its own VAT Law, multiple taxations will result in increases of prices of goods and services and collapsed in interstate trade.
“VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.”
Commenting on why Lagos could boast of a high VAT, the governors said; “Lagos accounts for our 50% VAT collection because most of the telecommunication companies, banks, manufacturing and other trading activities have their headquarters in Lagos, with the resultant and wrongful attribution of VAT.”
They however declared they would wait and respect the Supreme Court’s verdict on the matter.
“Until and unless the Supreme Court pronounces judgement on the substantive matter between Rivers State and Federal Government, the matter is sub judice and Northern States Governors Forum would respect this.”
Meanwhile, the chairman of the Nigerian Governors’ Forum, Kayode Fayemi, has also disclosed all governors were awaiting the Supreme Courts Judgement.
Speaking during an interview on Arise TV, Fayemi said, “For us at the Nigerian Governors’ Forum, this is an issue that we are looking both legally and politically.
“But our take on this is that the Supreme Court should accelerate its decision so that we have clarity over who should be in charge of Value Added Tax (VAT). Whether it is the Federal Inland Revenue Service, or States.
“States that have gone to court believe clearly that this responsibility evolves according to their own understanding of what the constitution says. The important thing is that our tax system is problematic, confusing, and contradictory.
“We need to do a lot more to clarify things so that it can give room for more efficient and effective collection of taxes.”