Northern governors reject VAT law by Lagos, Rivers

The Northern Governors’ Forum on Monday rejected the Value Added Tax law signed recently by the Lagos State government.

The governors also described as unconstitutional the power shift canvassed by their Southern counterparts and groups in the region.

In a statement issued at the end of their meeting in Kaduna by the Chairman of the Forum, Simon Lalong, the governors declared their support for the Federal Government on VAT.

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They insisted that until the Supreme Court rules on the substantive suit between the federal government and River State government, the matter was subjudice and would remain such.

The statement read: “Some Northern States Governors had earlier expressed views for a power-shift to the three geo-political zones in the South with a view to promoting unity and peace in the nation.

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“Notwithstanding their comments, the Forum unanimously condemn the statement by the Southern Governors’ Forum that the Presidency must go to the South.

“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:- score the majority votes; score at least 25 per cent of the votes cast in 2/3 States of the Federation. In the case of run-up, simple majority wins the election.

“On VAT, as responsible leaders, while we are constraint by the fact that the matter is subjudice, we however for the purposes of educating the public make the following observations:

“The judgment of the Federal High Court calls to question the constitutionality of VAT, withholding tax, education tax, Niger Delta Development Commission, National Information Technology Development Agency, 13 per cent derivation, National Economic Development Council and many other currently levied and collected by the Federal Government of Nigeria, Federal Inlands Revenue Service.

“Rivers and Lagos State Governments had enacted their own VAT laws and the Southern Governors’ Forum have expressed support for this course of action;

“VAT is being confused by these state governments as a sales tax. If every state enacted its own VAT Law, multiple taxations will result in increases in prices of goods and services and collapse in interstate trade. VAT is not a production tax like excise, but a terminal tax which is paid by the ultimate consumer;

“Another confusion is ignoring observation above and its ‘overall effect’. The reason Lagos account for our 50 per cent VAT collection is because many of the telecommunication companies, banks, manufacturing, and other trading activities have their headquarters in Lagos with the resultant and wrongful attribution of VAT.

“Until and unless the Supreme Court pronounces judgment on the substantive matter between Rivers State and Federal Government, the matter is subjudice and Northern States Governors Forum would respect this.”