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Opinion: Umahi's Rejection Of VAT Implementation And Why It May Increase Poverty In Ebonyi

Since the introduction of Value Added Tax (VAT) in some States like Lagos and Rivers State, its implementation in the Southern States of Nigeria has become a major issue of deliberation among Southern governors. Several meetings have been held in this regard and conclusions are yet to be made. However, in a recent meeting that was held by southern governors, a majority of them were in support of VAT Implementation in their respective States while Governor Dave Umahi was among the minority that kicked against it.

Photo: Southern Governors

Knowing that Value Added Tax (VAT) is a consumption tax which is payed when a service is rendered or goods are purchased, and the tax definitely moves to the purse of the government in charge, it is quite inexplicable why Gov Umahi would kick against such source of revenue for his State. Although, Gov Akeredolu of Ondo had earlier confirmed that it is in the power of the States in the country to decide if they will implement VAT payment for its residents.

Photo: Gov. Dave Umahi

It is noteworthy that this VAT payment is aimed at ensuring the availability of ample resources for the government of the State to build infrastructures, provide social amenities and also work towards the growth and development of the State. It is in my own interest to state why Umahi's Rejection of VAT may boost the poverty rate in his State.

Photo: Nigerian Naira

Possibility of Limited Resources:

Generally, VAT payment is a good source of revenue for the government. This is what Umahi may likely miss as a result of his decision. Hence, there is a possibility of not having sufficient resources that would aid the development of the State. Notably, the development of the State is inversely proportional to the poverty rate of his people. The higher the development of the vital sectors in the State, the lesser the poverty growth.

In conclusion, it is important to always remember that a stitch in time saves nine. Umahi on his own part, can have a rethink on VAT acceptance.

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Gov Akeredolu Ondo Southern States VAT Implementation Value Added Tax


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