It is no longer news that the Lagos and Rivers State governments have been in a legal tussle with the Federal government over their recent efforts to impose and collect VAT in their states. What's news now is that their Northern counterparts had in a recent meeting that was convened in Kaduna State some days trashed the very idea for states to collect Value Added Tax.
Photo Credit: Punch
Consequently, we all are aware that the ongoing destruction of beer commodities in the North by the controversial Hisbah group was one of the reasons why the Southern Governors Forum had endorsed the decision of Governor Wike and Sanwo-Olu on VAT collection.
Photo Credit: Facebook
According to their resolution, the governors had agreed that the North can't be destroying alcoholic beverages and still be receiving VAT that is being generated from it in the South.
However, amid the decision of the Southern governors for every state to charge and collect their VAT, here is one area the South may be affected negatively in terms of alcoholic beverages production.
Photo Credit: This Day Live
Everyone is certain that the raw material (Sorghum or guinea-corn) which is being used to produce all the alcoholic beverages that in turn generate VAT for the South is being cultivated and processed in the North.
Photo Credit: The Cable (Sorghum or guinea-corn)
States like Plateau, Bauchi, Nasarawa, and Kaduna among others are the major producers of this very Sorghum, and we all are aware that tax aren't attached to raw farm products until they are processed and converted into commodities.
However, the recent decision of the Southern governors may practically force the North to attach taxes to this Sorghum and other raw materials that are being exported to the South in a bid to generate their own revenues, and when this very development takes place we all may witness that a bottle of beer may end up costing twice its initial price.
At this juncture, the Southern governors need to contemplate deeply on what they want to achieve through this very internal VAT imposition and its possible consequences.
What are your thoughts?
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