The Northern Governors’ Forum on Monday held an Emergency Meeting at the Council Chamber of Sir Kashim Ibrahim House, Kaduna State, to discuss issues such as the decentralization of Value Added Tax (VAT).
According to them, if every state of federation collects VAT, would lead to multiple taxation and rise in prices of goods and services.
“The Northern State Governors Forum considered the on-going National debate on the collection of Value Added Tax (VAT). As responsible leaders while we are constraint by the fact that the matter is sub judice we however for the purposes of educating the public make the following observations:
“(a) The judgement 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% derivation, National Economic Development Council and many other currently levied and collected by the Federal Government of Nigeria, Federal Inlands Revenue Service.
“(b) Rivers and Lagos State Government had enacted their own VAT laws and the Southern Governors Forum have expressed support for this course of action;
“(c) VAT is being confused by these State Government as a sales tax. If every State enacted its own VAT Law, multiple taxation will result in increases of prices of goods and services and collapsed in interstate trade. VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer;
They further explained that why Lagos state accounts for a huge part of VAT, is because most of the big organizations such as telecommunication, banks, manufacturing and other trading activities have their headquarters in Lagos.
“Another confusion is ignoring observation above and its “overall effect”. The reason Lagos account 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”
They maintained that “until the Supreme Court upholds judgement on the substantive matter between Rivers State and Federal Government, the matter is sub judice and Northern States Governors Forum would respect this.”
On the part of power shift as demanded by Southern Governors’ after their meeting in Enugu, the Northern Governors’ forum said it is unconstitutional to make such demands, while quoting a section of the constitution that backs their decision.
“The Forum observed that some Northern States Governors had earlier expressed views for a power-shift to three Geo-Political Zone in the South with a view to promoting unity and peace in the Nation.
“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:-
“(a) score the majority votes;
“(b) score at least 25% of the votes cast in 2/3 States of the Federation;
“(c) In the case of run-up simple majority win the election.”
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