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Katsina City News
23 Nov, 2024
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Dr. Aliyu U. Tilde

Mr. Ayekooto is blaming Kano for low VAT. Ironically, it is because Kano VAT leaks down to Lagos. That is why we want change in the VAT law. The injustice must stop.

Go to Singer Market. Most of the VAT goes to Lagos because that is where the headquarters of the manufactured commodities are located. The same thing with all bank transactions, coca cola, calls and text messages, oil production in the Niger Delta and consumption nationwide, airlines, etc. Their VAT from all over the country is credited to Lagos.

And now in the new Tax Reform Bill, Lagos State wants more: to be given a whopping 60% derivation of it, while federal, 36 states (including Lagos, again) and 774 local governments share the remainder.

Not only that, Lagos, in the new Bill, wants the VAT to be raised to 10% now and doubled to 15% ultimately. The gap in VAT between it and states like Kano would double if the bill is adopted.

Multiply 60% by 15%, you get 9%. So 9% of any of the items we listed above will go to Lagos as derivation, ab initio, before it returns to the FAC table to take another share from the 6% remaining . From sucking the blood of other states through the Tax Reform Bill, the obesity of Lagos would worsen by the day.

Let us be bold enough to face justice. Credit Kano the VAT derived from the consumption in its markets, shops, banks, etc. There won’t be a room to blame it for low VAT.

VAT in the new bill should, one, be lowered to 2.5% until 2050 in the light of the present hardship; two, it must be credited to state of consumption, not the state where the headquarters of the commodity consumed is produced. Yes, Lagos would still lead in VAT but it would be a justified lead. Obesity is a disease.

20 November 2024