He said, “States do not have the capacity to collect VAT. It has taken FIRS about 28 years to build the capacity it has now. In 2020, FIRS generated N1.53tn from VAT but in the first six months of this year alone, it has collected N1tn, the highest it has collected within the same period.
“They have not done well with the predominantly revenue yielding taxes they have been collecting for many years. In my view, VAT should be collected centrally.” He argued that if VAT were collected by states, the Federal Government would be the biggest beneficiary because in 2020, over 50 per cent of the N1.53tn the FIRS generated from VAT was from import VAT and international non-import VAT, which is not within the jurisdiction of the states.
He pointed out that if states enacted their VAT laws, VAT generated from Lagos would reduce, saying that some states generate low VAT because part of what was generated in their states was reported under Lagos State and other big cities. “As much as I agree with the principle that if you don’t like alcohol, then don’t take VAT from alcohol. But that is not the most important conversation.”While some experts believe that it is better to have a conversation over how the money made from VAT is shared, some others believe it is best for states to collect their VAT, not only to foster fiscal federalism, but to also try something different.
Also, an economist, Mr Johnson Chukwu, who is the Chief Executive Officer of Cowry Asset Management, said he was in support of fiscal federalism and that states collecting their VAT was the way to go. “Taxes are extant laws, so the states would pass the necessary laws that would define the tax base as it relates to their states as well as the method of payment, which is what states such as Rivers and Lagos have done. For me, that is the way to go if we have to transform this economy.”
He added, “What will it profit the FIRS to collect the tax and give to the state? What will they gain?” He added, “For a political solution, I am of the view that whatever you contribute to the national purse, you deserve to have a commensurate proportion of it and that would stimulate you to generate more revenue. That would also challenge those not doing enough.
I love the mouth piece..GovWike. I love the ring man RotimiAkeredolu. I love the co mouthpiece jidesanwoolu. I love the underground fighters. Let's convert the pollution into a meaningful thing. Pay your tax and you vote during election. Southern Governors we hail
Na true talk nah If the number of cows can be counted as accredited voters then the milk generated from the cows should be used to pay tax
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