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 States have rights to collect VAT, say Governors Okowa and Emmanuel

States have rights to collect VAT, say Governors Okowa and Emmanuel


The raging controversy over Value Added Tax, VAT, continued yesterday with Governor Ifeanyi Okowa of Delta State, and his counterpart in Akwa Ibom State, Udom Emmanuel, insisting that collection of the tax remained the responsibility of states.

While Okowa said states were were prepared and positioned to collect the tax which he described as consumption tax, Emmanuel argued that decentralisation of  collection of the tax would favour every single state in the country.

Recall that Rivers and Lagos state governments are currently in court to wrest control of collection of the tax from the federal government.

Southern governors in their last meeting in Enugu last week also threw their weights behind collection of the tax by states.

Okowa, who spoke when he received the British High Commissioner to Nigeria, Catriona Laing in his office in Asaba, said: “The truth is that it is a consumption tax and everybody knows that it belongs to states.

“We have found ourselves where we are and I think that states, including the Southern states, have come out to speak boldly on this. We believe that it is supposed to be a collection to be made by the states.

“Yes, are the states prepared to collect it? There could be initial challenges and I think these are things that can be discussed and in the course of the discussion, we are able to find out how best to do that.

“There could be a collaboration with the Federal Inland Revenue Services, FIRS, between them and the states directly, to fine-tune the best way to do the collection but the first thing is that it is a consumption tax and it ought to be at the level of the states to collect.”

Okowa informed his guests that the global community must lend its support to the country, insisting that Nigerians were desirous for free and credible elections in 2023 and beyond.

He identified unemployment as one of the factors responsible for insecurity in the country but disclosed that his administration had invested heavily in entrepreneurship programmes for youths, women, and the girl-child in the state.

Laing who spoke earlier said her delegation was in Delta State in furtherance of the relationship between the British High Commission and the state government, adding that her country was concerned about the issues of VAT, education, insecurity, and the 2023 general elections in the country.


Decentralisation of VAT collection will favour every state

On his part, Akwa Ibom State governor, Udom Emmanuel, said decentralisation of VAT collection would benefit all states.

Emmanuel, who spoke in an interview on Arise TV yesterday, noted that opponents of the decentralisation of VAT collection couldn’t envision the “hidden treasure” it will bring.

He said: “If my brother states have gone to court, we are all one and in the same basket. All 36 states will not need to join at the same time. As of today, my brother in Rivers has gone far enough. I don’t rush to sign that into law. For now, let me allow the rule of law. Let’s allow the rule of law to take its course.

“Some states saying that this is not needed are probably saying so because people don’t see the hidden treasure in VAT. There are so many things, and we’ve discussed this at so many fora.”

“For example, if I sell a house in Uyo, and the value of the property is enhanced because of good roads, electricity, and security that’s been provided by the state government and when VAT is taken out of that property, why shouldn’t that tax 100 percent come to me? Why should I take it to go and share?

“It’s the same thing everywhere, so those who are saying that VAT cannot favour everyone, let them know that it will favour every single state in this country. There’s no exclusion at all. Because it’s a consumption tax, and whenever there are human beings, there must be activities. And where there is activity, there must be consumption, and where there is consumption, VAT follows, which will lead to revenue.”

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