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VAT: A Tale Of The South Attempting To Break Free From The Grip Of Some States

The nation was thrown into a state of shock recently when Governor Nyesom Wike of Rivers State took to social media to reveal the injustice being meted out to some southern states by the Federal Government in terms of revenue sharing.

Gov. Wike. Photo Credit: Premium Times.

Wike had alleged that Rivers and Lagos, two notably rich southern states, were not being fairly treated by the Federal Government in terms of how Value Added Tax (VAT), generated by states, was shared. He alleged that unlike Kano, Rivers and Lagos received a meagre percentage of what they contributed as VAT to the FG. Rivers received about 31% of its total VAT revenue, while Lagos received only 20%. The controversy stems from the fact that Kano State received 100% of what it contributed, despite contributing significantly less than both southern states.

Photo Credit: Wike @Facebook.

Before the controversy on VAT began, the Federal Inland Revenue Service (FIRS) was in charge of its generation in states. However, after the fracas that ensued between Wike and the Federal Government, a Federal High Court granted Rivers and in extension, Lagos, the right to collect tax in their respective states. An appeal court, however, ordered all parties to maintain the status quo, pending the resolution of the matter in court.

Govs. Wike and Sanwo-Olu. Photo Credit: PUNCH.

Through the VAT controversy, we may be witnessing an attempt by the South to begin to free itself from the parasitic shackles of some Northern States that have refused to develop their own unique way of revenue generation.

Some Northern governors who have opposed a state-controlled VAT collection system argued that it would upset the current balance, and that some states (particularly northern) would not survive if the control of VAT is taken away from the Federal government.

Gov. Yahaya Inuwa asked Lagos and Rivers to be their brother's keeper over VAT. Credit: PUNCH.

Though the above statement sounds plausible, it is actually unfair for the likes of Lagos and Rivers to keep generating revenue through VAT, while some Northern states serve as consumers. Why should the South hamper its development because it wants to carry some Northern states along? Where has the "Brother's Keeper" mentality led us to?

Photo Credit: Vanguard.

For instance, Sharia Law in the North bans the consumption of alcoholic drinks, which are a major source of VAT generation. Why then should the North still receive from the revenue Southern states generated from selling alcohol, while it impedes itself from generating the same revenue?

VAT has allowed many Northern States to remain lazy and not develop their own unique system of revenue generation. Since they are sure of getting a chunk of the revenue generated by rich southern states like Rivers and Lagos, why should they improve their revenue?

The North can improve its revenue by reinventing the groundnut pyramids of the 1950s. Credit: Transformation watch.

I would end this with a personal quote; Put a clever man in a desert devoid of resources and watch him invent new methods of survival. In this case, the North would have to wean itself from resources generated from the South if it aims to stop being a parasite and develop creative means of generating revenue. All these also applies to the Federal Government's system of generating revenue through the sale of crude in the South, only to share the money between Northern and Southern States.

Content created and supplied by: Victorr14 (via Opera News )

Federal Government Kano Lagos Rivers Wike


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