VAT claim is about fiscal federalism- Lagos State

Lagos State government on Thursday said it has a strong case in its demand to collect the Value Added Tax (VAT).

It said its claims were also about fiscal federalism.

The state said VAT collection would neither impoverish other states nor would the process be cumbersome.

Commissioner for Information Strategy Gbenga Omotoso, who spoke on ‘Your View’ on TVC, said: “Lagos has a solid case in the ongoing legal dispute as the crux of the disagreement is about equity, justice and fairness.

“Whichever way it goes, it will also enrich our jurisprudence and enhance the way we see and relate to the law.

“No matter what, Lagos will always stand for true fiscal federalism.”

The commissioner noted that the volume of air, sea and road transport activities in Lagos puts pressure on the state’s infrastructure.

He added that additional revenue from VAT would facilitate infrastructure development for faster movement of goods and services, as well as economic growth for the benefit of Lagos and other states since prices will fall.

On the demand for a special status for Lagos, Omotoso described Lagos as a ‘giant that carries most of the burden of Nigeria on its shoulders and the engine-room of the nation’s financial and business activities.

“Lagos must be empowered to play this role to the benefit of Nigerians”, he insisted.

Omotoso noted that other states can partner with Lagos to generate more revenue or resources by taking advantage of its huge population and massive market to sell their agricultural produce and other products, while profits realised therefrom would be repatriated to create more wealth for farmers and other producers in such states.

According to him, Lagos almost became an orphan following the movement of the Federal Capital Territory to Abuja in 1991, resulting in modest support from the Federal Government.

He was confident there would be resources for more infrastructure and facilities in transportation, health, education, e.t.c, that will benefit Lagosians and others who troop in every day if the state is allowed to collect VAT.

Omotoso added that the state will sensitise residents concerning its position on the debate.

Also yesterday, Akwa Ibom State Governor Udom Emmanuel said states were entitled to collect VAT.

He was a guest on Arise TV News ‘Morning Show’ aired to mark the state’s 34th anniversary.

According to him, it was wrong for the Federal Government to collect and share revenue from VAT because it is generated from businesses and activities in states.

Minister of Finance, Zainab Ahmed, yesterday asked all taxpayers to continue remitting VAT to the Federal Inland Revenue Service (FIRS).

She said in an advertorial: “The ruling of the Court of Appeal employs all taxpayers in all the states to continue to collect VAT on behalf of the government in compliance with the VAT Act.”

But, Emmanuel said despite the huge oil and gas investments in the state, Akwa Ibom receives a paltry N2 billion from VAT.

He backed his Rivers and Lagos states counterparts, Nyesom Wike and Babajide Sanwo-Olu, both of whom have signed their VAT bills.

Emmanuel said: “If my brother state has gone to court, it is the same principle that we stand on. I think we are all in the same bucket, the same basket.

“All the 36 states do not need to join at the same time. Today my brother in Rivers State has gone far enough.

“I think the case has gone to the Appeal Court and there is also a stay of execution.

“Let me allow the rule of law. But for states saying they do not need VAT, maybe they do not know the hidden treasure in VAT.

“If today I sell a house in Uyo, or any other person sells a property, the value is enhanced because of the good roads, electricity, security and water I have created, and the value I have added to the property. Why should the VAT on the property not come to me 100 per cent?

“Just look at the money I have spent on capital projects in the first quarter put at N143 billion, if you take 7.5 per cent of that, why should all not come to me?”