Start Producing Taxable Products, Expert Tasks Northern States

By Musa Adeniyi, Osogbo

As legal contest over collection of Value Added Taxes VAT continue between Federal and the state governments in Nigeria, state governments in the northern part have been advised to encourage production of taxable products and services in their respective state in order to deepen competitive federalism in the country.

A political analyst and legal practitioner, Dr Tunji Ogunyemi of the faculty of Arts, Obafemi Awolowo University, Ile Ife gave this advice in Osogbo on Tuesday while featuring in a radio program.

Recall that the current battle over VAT collection came on the heels of a judgement by a Federal High Court in
Porthacourt establishing the constitutional responsibility of the state governments to collect VAT in their domains.

Speaking on the judgement,Dr. Ogunyemi commended the Rivers State goernment for the bold step it has taken to challenge what he called illegality on the part of the Federal Inland Revenue Services. He described the judgement as a welcome development as it has empowered the States to collect VAT in their domains.

“With the judgement of the Federal High Court in River State and the appeal Court judgement that follows, state governments can go ahead and collect VAT in their respective States until the supreme Court says otherwise.” He said
according to the university don, Lagos and River States would benefit hugely from the collection of VAT as both generate 55 and 35% respectively of the total revenue from VAT.

He, however, added that some States particularly, from the northern region stand to gain little because they have not made efforts to improve VAT in their domains.

He enjoined any state that wants to benefit more from VAT to start encouraging production of taxable products and services .

“Each state has goods and services in which it has comparative advantage, such products should be fully developed by each state so as to deepen competitive federalism in the country.”He said.

“Competitive federalism is a major way through which we can develop our economy in this country.”He added.