Kano State collected more money as Value Added Tax (VAT) than the entire South East zone in the first eight months of 2021, an exclusive data obtained by Daily Trust show.
Records of VAT receipts from Federal Inland Revenue Services (FIRS) seen by Daily Trust indicate that the state collected N24.4bn, ahead of the five south-eastern states with accumulated collection of N20bn.
The data further revealed that Kaduna State with N19bn accrual also did better than Akwa Ibom (N9.3bn), Bayelsa (N13bn), Delta (N13bn), Edo (N9bn), and Ogun (N11bn).
For instance, Kaduna’s N19.8bn is higher than the combined collection of Abia, Cross River, Osun, Ekiti, Ondo and Imo.
Abia, according to the chart, collected N2.2bn representing 0.22%; Cross River collected N1.9bn or 0.19%; Osun collected N2.07bn or 0.20; Ekiti made N6.2bn or 0.62; Ondo collected N4.8bn or 0.48, while Imo collected 1.01bn or 0.10 %.
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Yobe in the North East collected N9.3bn rubbing shoulders with Akwa Ibom (N9.3bn), Edo (N9bn), Ebonyi (N7.2bn) and Ekiti (N6.2bn).
Lagos and the FCT, combined, contribute 65.22% of the total, while all the remaining 35 states contribute 34.78 percent of the total.
This revelation is coming amidst VAT row between the federal government and some states, and allegations that some states, majorly in the North, benefit more than what they contribute to the central pool.
The statics show that Lagos is on top of the chart with 41.5 percent of the total VAT amounting to N421.2bn while Zamfara collected the least recording, N762.5m or 0.08 percent of the total sum.
Lagos is followed by the FCT which collected N241bn or 23.74 %; Rivers collected N92.3bn or 9.09 % while Oyo followed with N61bn representing 6.01%.
Other top performers in the chart are Kano with N24.4bn or 2.40% and Kaduna with N19.8bn or 1.95%.
However, in spite of Zamfara, a state in the North West recording the least performance, more northern States performed better than the southern states as the figure indicated.
Despite the crisis in some of the North East states, the region collected a total of N27.7bn compared to N21bn collected by the south-eastern region of the country.
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Exclusive of Lagos, the other South West states collected a total of N85.8bn only while the North East and North West, which have been heavily bedevilled by insurgency and other security challenges, have collected N86.5bn within the same period.
With the exception of Lagos (N421.2bn), Rivers (92.3bn), Oyo (N61bn), Kano (N24bn) and Kaduna (19bn) most states have posted an average performance lower than N10bn.
How VAT pitched southern, northern states
A verdict by a Federal High Court in Rivers on August 9, 2021, on who has the power to collect VAT favoured the state government; a development seen as a victory for those clamouring for decentralised collection.
Daily Trust reports that both Rivers and Lagos had sued the federal government over the continued collection of VAT by the FIRS.
The controversy spiked after a meeting of the Southern Governors Forum (SGF) endorsed the position of Lagos and Rivers and insisted on allowing every state to collect its VAT revenue individually.
Members of the Northern Governors Forum (NGF) shot back at their southern counterparts, saying the southern governors were confusing the value-added tax (VAT) with sales tax.
The governors noted that the reason Lagos would account for 50 percent of VAT collection was that most telecommunication companies, banks, manufacturing and other trading activities had their headquarters in the state.
“VAT is being confused by these state governments as a sales tax. If every state enacted its own VAT Law, multiple taxations will result in increases in prices of goods and services and collapse in interstate trade. VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer,” chairman of the forum, Governor Simon Lalong had said.
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‘Claim VAT sharing benefits northern states more than the southern erroneous’
An economist and a former presidential candidate, Mr. Gbenga Olawepo-Hashim, said those who have “managed the information about the VAT wars have created the impression that the present distribution benefits the northern states more than the southern states.
“They try to make it look like the VAT is part of the ‘hegemonic domination’ of the North. Many commentators hardly look at the data before they hit their keyboards online. Many swallowed hook line and sinker very obvious lies.”
Olawepo-Hashim argued that apart from Lagos, Rivers and the FCT who benefit from the fact that they host the headquarters of major economic, political and oil-related institutions, most states apart from Oyo are doing badly in VAT generation and a lot of southern states are woeful.
“Most states, whether they are in the North or South are doing badly in production of goods and services except for Lagos, Rivers, Oyo, Kano and Kaduna states. The present centrally collected VAT which is then distributed subsidizes everybody,” he noted.
He maintained that in comparison to eastern states, Kaduna, Kano and Katsina are doing better than Abia, Anambra, Imo, and Enugu, adding that based on available data in the past eight months, total VAT generated in Abia was N2.290b, Anambra -N5.938b, Imo -N1.941 compared to Kaduna -N18.262b and Kano -N24.492b.
“Conversely, when it came to distribution, Abia State got N20.020b for generating N2billion. Abia got 10 times what it contributed whereas Kaduna and Kano did not get as much as twice what they contributed. Lagos, Rivers and Oyo got lower.
Similarly, President of Arewa Youth Consultative Forum (AYCF), Alhaji Yerima Shettima in a chat with Daily Trust said he was not surprised with the figure, insisting the North is not doing badly as it is being portrayed in the VAT war.
He said, “We are not good at talking too much. We are more real and more practical. If there is any region who believes more in Nigeria is the Northern part of this country that believes we must work together.
“When Wike started the issue, some of us were shocked. The man who believes he wants to be a national leader, a nationalist, came up with that idea, making it as if he is fighting the North. Some of us took his pronouncements at that time very personal because the way he presented it was funny.
“The truth of the matter is that we must try as much as possible to discourage what will disunite us. Let us promote things that would unite us. Together, we can do better.
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“There is no region in this country that has nothing to bring to the table. But because you have a system that encourages people to only eye the oil and as a result of this out of 1001 things we have on the ground in terms of mineral resources, today we are receiving a lot of abuses and insults from people. We could have done better if we were running a regional system of government where all regions will go back and harness their resources, then pay 13 percent to the centre. These arrogances and abuses on our sensibilities as a nation would not come to play anymore,” he said.
States will bear the brunt of decentralised collection – Experts
Fiscal Policy Partner and Africa Tax Leader at the PriceWaterCoopers (PwC), Taiwo Oyedele said if the right to collect VAT is given to states, “the biggest losers will be the states except for Lagos. A few states like Kano, Rivers, Oyo, Kaduna, Delta and Katsina may experience minimal impact, while at least 30 states, which account for less than 20 percent of VAT collection will suffer significant revenue decline.
“The federal government may be better off given that FCT generates the second-highest VAT (after Lagos) in addition to import and non-import foreign VAT,” he said.
Commenting, Ogbeide E. Benjamin, a tax expert and former chairman, Chartered Institute of Taxation of Nigeria (CITN), Abuja Chapter, said, “The impact of this judgment on the finances of the states will be enormous.”
According to him, “VAT is consumption-based and on several items, some of which are outlawed in some states. I believe the country stands to profit by allowing states to administer VAT. By this, states will be further encouraged to scale up their economic drive to attract more foreign direct investments and local investments since they will be the ones to get the VAT benefits.”
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Niger, Benin, Togo Owe Nigeria N5.8bn For Power In 2020 – Report
The Republic of the Niger, Republic of Benin and Togolese Republic did not pay a N5.86 billion electricity debt in 2020 from an invoice of N16.31bn issued to them by the Nigerian Electricity Market (NEM) for the year.
According to the report for 2020 released by the Nigerian Electricity Regulatory Commission (NERC), the companies for each of the countries are Societe Nigerienne d’electricite (SNE), Societe Beninoise d’Energie Electrique (SBEE) and Compagnie Energie Electrique du Togo (CEET) respectively.
The remittances showed that the Nigerian Market Operator (MO) gave the countries N16.31bn from which they paid N10.45bn for the services received from MO, while N5.86bn was outstanding.
Ajaokuta Steel Company Ltd, termed a special customer in Nigeria, and its host community did not pay anything after consuming N1.08bn worth of electricity in the year. The invoice from Nigerian Bulk Electricity Trading (NBET) to the company was N930m, while that of MO was N150m. NERC recommended in the report that, “MO and NBET must activate the relevant safeguards against continued non-settlement of market obligations by these market participants.”
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Also, in 2020 NERC issued five new generation licences and renewed three others which would add 667.70 megawatts (MW) to the grid. The new licences can add 235MW while the renewed licences were for 346MW capacity of electricity generation. It also gave approval to 33 Meter Asset Providers (MAPs) and certified 17 Meter Service Providers (MSPs).
On metering, the report indicated that 537,400 meters were installed for consumers in 2020, a 60.4 per cent higher figure than the 334,896 meters installed in 2019.
Despite this, the huge metering gap for end-use customers is still a key challenge in the industry. Registered customers grew to 11,841,819 (11.8m) in 2020 but just 4,666,191 (4.6m) or 39.40 per cent of them were metered.
“Therefore, 60.60 per cent of the registered electricity customers are on estimated billing contributing to apathy toward payment for electricity bills,” it stated.
Chinese contractor lays final track beam of Lagos blue rail
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The laying of the last track beam (T-beam) of a 27-kilometre Lagos Blue Rail Mass Transit commenced on Wednesday with a promise to deliver the landmark project in December this year as scheduled.
Governor Babajide Sanwo-Olu flagged off the engineering procedure at the site of the Marina station of the rail project.
A statement by the governor’s Chief Press Secretary, Gboyega Akosile, said, “with the laying of the final T-Beam, all difficult civil works standing in the way of the Lagos Blue Rail Line, which started in 2012, have been overcome.
“The contractor – China Civil Engineering Construction Corporation (CCECC) – will now go ahead to set the rail tracks along the alignment and move the project to completion.”
It said Governor Sanwo-Olu got the commitment of the Lagos Metropolitan Area Transport Authority (LAMATA) and the contractor to the December deadline for the Blue Line project’s completion.
Lagos Government will be delivering two rail mass transit projects within the first term of the Sanwo-Olu administration. The Blue Line traversing between Mile 2 and Marina will be operated on Electric Motor Unit (EMU); while the 37-kilometre Red Line, from Agbado to Ebute Metta, will operate on Automotive Gas Oil (AGO).
Speaking at the launch of the last T-Beam on the Blue Line, Sanwo-Olu said the achievement signposted his administration’s commitment to bringing succour to Lagosians and give them choices in mass transportation.
The governor said the rail projects represented the audacity of his administration’s vision to deliver a robust integrated transit system as encapsulated in the Traffic Management and Transportation pillar of his government’s T.H.E.M.E.S. development agenda.
He said, “Today’s final T-beam launch indicates that we are gradually inching to the completion of the civil infrastructure for the first phase of the Blue Line traversing from Mile 2 to Marina. The engineering work today completes a total of 1,967 piles foundation, while we have also completed three 306 platforms, 310 piers, 267 cover beams and erection of 984 T-beams.
“We are not just making promises; people are beginning to see for themselves that all the milestones and the difficult tasks we are meant to achieve to ensure operation of the Blue Line are being achieved. The Marina Station, which is the iconic terminal for the Blue Line, will be completed within two-and-half months. I am restating here that we will formally complete this Blue Line before December 31, 2022.”
The governor said the two sets of EMU coaches already procured for the Blue Line operations would arrive in Lagos from China before the end of October. He said the rail line would be test run immediately after completion, while passenger movement would start within the first quarter of 2023.
Sanwo-Olu said the construction of the second phase of the Blue Line project would commence after the start of operation, which would extend the rail project from Mile 2 to Okokomaiko.
He said Blue Line stations would be built at Festac, Alakija, Trade Fair, Volkswagen, LASU and Okokomaiko.
The governor disclosed that talks were being held with the Ogun State Government for possible extension of the rail line to Agbara.
He said, “The second phase of the Blue Line project will be an easy infrastructure to develop because the marked alignment for stations and tracks are largely at grid level. While we are at this, the Red Line is also on the way. This is a start-and-end project for our administration, with about seven stations concurrently being built. This will redefine mass transportation in Lagos.
“To our citizens, I say the Blue Line is for real and you will ride on it in no distant future. For the Doubting Thomases and people that do not like our face, their eyes cannot disbelieve in the infrastructure we are bequeathing to the citizens of our State. They cannot disbelieve in our bold effort and commitment to improve mobility and deliver transport infrastructure that brings ease to our people.”
LAMATA Managing Director, Abimbola Akinajo, an engineer, said the first 13-kilometre stretch of the Blue Line construction was divided into four phases to enable the government to fund the project from its internally generated revenue.
To get to the current status, she said the construction work experienced disturbances and delays in the relocation of submarine cables, submarine natural gas pipelines, and removal of underground shipwrecks.
“Just as we are laying the final T-beam for the rail tracks, we are also currently retrofitting the train stations at Mile 2, Alaba, Iganmu and National Theatre with light in readiness for passenger operation in the first quarter of 2023,” Akinajo said.
CCECC Chairman, Mr Liu Wei Min, described the event as the most significant level of the project.
He said, “We express our sincere gratitude to the present administration under the leadership of Mr Sanwo-Olu in reaching this milestone.
“We will continue to work to meet the ultimate target in delivering the entire project with high standards and quality.”
The T-beam laying event was also attended by Consul General of the People’s Republic of China in Lagos, Mr Chu Mao ming.
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