Nothern governors hold emergency meeting over VAT, others
Governors of states in Nigeria’s northern region are holding an emergency meeting in Kaduna on Monday over the sharing of Value Added Tax (VAT) and other issues.
BBC Hausa service reported that Kaduna State Governor Mallam Nasiru El-Rufai will host the meeting, which will be chaired by the Chairman of the Northern Governors Association and Governor of Plateau, Simon Lalong.
Nigerian southern states and the country’s tax collection agency Federal Inland Revenue Service (FIRS) have been at loggerheads over the collection of VAT with Lagos and Rivers state being at the forefront.
A federal court in Port Harcourt in August ruled that Rivers State had the right to collect its taxes.
However, the Federal Inland Revenue Service (FIRS) has appealed the ruling.
Lagos and River State houses of assembly have since passed bills empowering the state government to collect VAT in their states.
Rivers State governor Nyesom Wike and his Lagos State counterpart Babajide Sanwo-Olu have signed the bills into law.
The law passed by the Lagos State House of Assembly empowers the states to charge VAT at the rate of six percent on the value of goods and services in the state.
The federal government currently collects 7.5% as VAT.
It states that “the value of taxable goods and services shall be determined in the following ways: where the supply is for a money consideration, its value shall be deemed to be an amount which with the addition of the tax chargeable is equal to the consideration.”
The law further states that revenue accruing from VAT would be shared on a ratio of 75 percent to 25 percent between the state government and the Local Government Council Areas.
But Nigeria’s attorney-general Abubakar Malami said that no state has the right to collect national taxes.