The topic of VAT collection by states have been up for debate over the the past few weeks, value added tax (VAT) is being collected by the federal government through the federal inland revenue service (FIRS) and then redistributed among states through quota system. However, states like Lagos and Rivers state are pushing for the collection of VAT by respective states, this is because the government of Lagos and Rivers state believe some states are being lazy by depending on revenue from other states.
The southern governors gave their support to the collection of VAT by states but their nothern counterparts have bemoaned the idea. This is because most nothern states generate low VAT revenue, but there are investments and industries nothern states of Nigeria can generate high VAT from if they give room for investors by relaxing some of their laws, below are the sectors:
- Breweries and liquor producing companies.
Photo of beer been produced.
Breweries and alcohol producing companies will no doubt add to the VAT revenue of the northern states if they can relax their laws and allow these companies to thrive. Alcohol producing companies currently have no reasons to invest in the northern part of the country because there are laws frustrating their business and profit making goals in the northern region.
Hisbah destroying some alcoholic beverages.
The Nigerian brewery and other companies that produce alcoholic beverages control a huge sector of the economy in southern Nigeria and northern states can generate more VAT from these alcohol making companies if the laws are made favourable for them.
- Club houses, Guest houses and hospitality arenas.
A club house. Picture for illustrative purpose only.
Compared to the southern region, northern Nigeria has a relatively low amount of Guest and Club houses, this is probably due to the high effect of sharia law in the region. Many perceive Club houses, Guests houses and most hospitality centers as areas where beer and alcoholic beverages are been sold, so it puts this type of establishment in a bad light. Northern states can generate more VAT from Motels, Guest and Club houses if the laws of the region are made to favour the hospitality industry.
I think, northern leaders should relax some of the religious laws in their states so as to attract foreigners and investors to the region.
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