Northern governors reject power shift, school Southern counterparts on VAT

Nigeria’s northern state governors rose from a meeting on Monday, with resolutions contrary to those of their southern counterparts, on rotational presidency and the right of states to collect the Value Added Tax (VAT).

The southern governors had at their recent meeting in Enugu, reiterated their position on the south producing the next president of Nigeria, come 2023 general election. The governors also rallied behind one of their own, Governor Nyesom Wike, for state collection of VAT, after a Federal High Court in Port Harcourt, Rivers State, held that the state government could collect VAT.

However, the northern governors, arising from an emergency meeting with traditional rulers, in Kaduna, said their southern colleagues are mixing up issues between Sales Tax and VAT.

“If every State enacted its own VAT Law, multiple taxation will result in increases of prices of goods and services and collapse in interstate trade. VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.

“Another confusion is ignoring observation above and its ‘overall effect.’ The reason Lagos accounts for our 50% VAT collection is 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,” the governors submitted.

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Speaking on behalf of his colleagues, the Northern Governors Forum chairman and governor of Plateau State, Simon Lalong, said as responsible leaders, while the Forum was constrained by the fact that the matter of VAT was sub judice, it must, for the sake of educating the public, state that the judgment of the Port Harcourt court called to question the constitutionality of “VAT, withholding tax, education tax, Niger Delta Development Commission, National Information Technology Development Agency, 13% derivation, National Economic Development Council and many others currently levied and collected by the Federal Government of Nigeria, Federal Inlands Revenue Service.”

Lalong said though Rivers and Lagos state governments had enacted their own VAT laws, unless the Supreme Court pronounces judgment on the substantive matter between Rivers State and Federal Government, the matter is sub judice and the northern state governors would respect this.

The governors also described as unconstitutional, the position of their Southern counterparts that the country’s next president must come from their region.

The Forum said even though some northern governors had earlier expressed views for a power-shift to the south, with a view to promoting unity and peace in the country, the statement by the Southern Governors Forum that the Presidency must go to the south was unacceptable.

Lalong, reading out the resolutions, said: “The statement is quite contradictory with the provision of the Constitution of the Federal Republic of Nigeria (1999) as amended that the elected President shall secure at least 25 percent of the votes cast in 2/3 states of the federation. In the case of run-up simple majority win the election.”

Southern governors resolve to collect VAT, insist on power shift