The Rivers State Governor, Mr. Nyesom Wike, yesterday, signed into law bills on Value Added Tax (VAT) collection, Open Grazing Prohibition in the state.
Wike who spoke shortly after signing the bills into law at the Government House, Port Harcourt, said that the judgment of the Federal High Court sitting in Port Harcourt had sufficiently addressed the illegality perpetrated by the Federal Inland Revenue Services (FIRS) on behalf of the Federal Government in the collection of VAT in States.
Other bills that were signed into law by the governor include the Valued Added Tax Law No. 4 of 2021; The Open Rearing and Grazing Prohibition Law No 5 of 2021; The Child’s Rights Amendment Law No 2 of 2021; The Residents Registration Agency Law No 6 of 2021 and the Naming and Renaming of Infrastructure Law No3 of 2021.
The signed bills were recently passed by the Rivers State House of Assembly.
Wike pointed out that when agencies of the federal government are allowed to illegally demand and collect taxes meant for the state government to collect, they strangulate the state financially and turn them to be beggars.
He said: “But we (Rivers State) are standing on the part of history as representatives of the state to have taken the bull by the horn to challenge the illegality of the Federal Government through the Federal inland Revenue Services (FIRS).
“Of course, we are all aware that the states have already been strangulated. Most states depend on allocation from the federation account. States have been turned to beggars. Hardly will any day pass that you won’t see one state or the other going to Abuja to beg for one fund or the other.”
He said no campaign of calumny or blackmail on the part of Federal Inland Revenue Service (FIRS) would make what is illegal become legal. He dismissed the FIRS’s propaganda that 30 states will suffer if some states are allowed to collect VAT.
Wike pointed out that his concern is on establishing whose duty it is to collect VAT and the constitutionality of such position before talking about who is going to suffer or not.
He said: “In this Rivers State, we awarded contract to companies and within the last month, we paid over N30billion to the contractors and 7.5% will now be deducted from that and to be given to FIRS.
“Now, look at 7.5 per cent of N30 billion of contracts we awarded to companies in Rivers State, you will be talking about almost N3billion only from that source. Now, at the end of the month, Rivers State government has never received more than N2 billion from VAT. So, I have contributed more through the award of contract and you are giving me less. What’s the justification for it?”
The governor said that there are plans already for FIRS to introduce Road Tax and this is likely to take away more duties from the states, and further emasculate them financially.
“Which are the roads? Are they the roads the state government is paying for or the roads federal government has constructed? So, at the end of the day, they have taken over the functions of the state government and the state is left with nothing.”
The governor regretted that the state governments have been so emasculated that they could barely survive without monthly revenue received from Federation Accounts Allocation Committee (FAAC).
He stressed that the overbearing attitude of the federal government, impinged on attaining financial autonomy for the legislature and the judiciary since the states were not allowed to collect due revenues as specified by the country’s constitution.
Wike said that with the Petroleum Industry Act (PIA) passed and signed into law, there shall be unbundling of NNPC, which means that NNPC remittance to the federation account would now be less, requiring every state to look inwards on how to survive.
He assured that every area that the law allowed the state governments to collect revenue would be maximised for the survival of the state.
Speaking on the Open Rearing and Grazing Prohibition Law, No.5 of 2021, Governor Wike said that allowing open grazing of cattle would be inimical to development and peace.
The governor said that cattle rearing are an agricultural business and the law that has specified ranching is so intended in order to stem clash between herdsmen who go to destroy farmland, crops, and having problems with farmers that lead to fighting and killing of themselves.
“It is no longer a story. All of us know what our people have suffered in terms of this open grazing. Today all Nigerians have come to accept the reality that open grazing is no longer fashionable. Even our brothers in the north have agreed that it is no longer fashionable,” he said.
On the Child’s Rights Amendment Law No 2 of 2021, Wike noted that with such law in place now, family courts can become operational in the state.
The governor also said that every resident in the state should be registered was provided by the Residents Registration Agency Law No 6 of 2021, to enable the state government know their status, what they do and where they reside for purposes of security planning.
Similarly, the Speaker of the Rivers State House of Assembly, Rt. Hon. Ikuinyi-Owaji Ibani, described the collection of VAT by FIRS as the worst form of retrogressive tax in any tax regime.
Ibani commended the governor and the state government for challenging the constitutionality of FIRS collection of VAT in states.
He stated that the signing of the VAT law would ensure that Rivers’ people would not plunge into extreme poverty.
The speaker further said that the law banning open grazing in Rivers State would cure both the symptom and the disease of herders and farmer bloody conflict.
He said lawmakers would continue to partner with the executive in providing requisite laws that would advance the state for the good of posterity.