As scramble between the Federal Government and some some states continues over which tier of government should collect Value Added Tax (VAT) from companies or businesses in the country, information gathered has revealed that no fewer than 10 states may face financial crisis if collection of VAT is eventually granted to states by the court.
Photo Credit: BBC
Recall the matter took a new twist on Friday, after a Court of Appeal sitting in Abuja, ordered both Rivers and Lagos States to maintain status quo on the collection of VAT, pending the determination of an appeal that was lodged before it by the Federal Inland Revenue Service, FIRS.
To this end, as diverse reactions continues to trail the new development, a look into the data (from Nigeria Beareau of Statistics) of states Internally Generated Revenues (IGR) in 2020, revealed 10 states with the least IGR and as a result, may face financial crunch because of it reliance on federal allocations.
Photo Credit: Dailypost
According to the data, Yobe generated the least IGR in 2020 with N7.7bn.
Other states are Taraba (8.1bn), Adamawa (8.3bn), Gombe (8.5bn), Ekiti (8.7bn), Benue (10.4bn), Niger (10.5bn) Katsina (11.3bn) Borno (11.5bn) and Sokoto (11.7bn).
Surprisingly, these states which generated the 10 least IGR in 2020, are all Northern states except Ekiti.
Photo Credit: Dailypost
Meanwhile, with Gombe state governor, Muhammadu Inuwa Yahaya and his counterpart in Kogi state, Yahaya Bello, has admonished Rivers and Lagos state Governors, to reconsider their stance on tax collection, arguing that it will have adverse effects on their states and that of others.
Consequently, while the Akwa Ibom State House of Assembly it would soon start work on a bill to enable the state government to collect VAT, Benue state government disclosed on Friday that it will wait on the verdict of the Supreme Court on the contentious issue before it takes stand on it.
Photo Credit: Punchng
But in your view, do you agree that states should be empowered to collect VAT instead of Federal Government ?
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