Nigeria’s states will struggle to collect VAT | The Guardian Nigeria News - Nigeria and World News

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The Federal Inland Revenue Service, on behalf of Nigeria’s federal government, has been locked in a legal tussle with the Rivers and Lagos state governments over the collection of value-added tax. In the last few minutes, a VAT collection Bill, similar to the aforementioned two states, has passed the second reading in the Ogun State House of Assembly. It is going to become a law.

The return to civilian rule in 1999 gave some states, starting with Lagos, the courage to challenge the FG on various parts of tax collection. After Lagos lost on a technicality at the Supreme Court in 2014, it kinda relaxed, but now that the Rivers State Government has successfully challenged the powers of the Federal Government to collect the VAT, Lagos is back on the hunt.

This battle for legitimacy will also be felt in the area of tax collection. International financial institutions like the World Bank and the IMF have entrenched a belief that Nigerians do not pay tax, or that taxation is only focused on the formal sector. Nigerians have also parroted this for years. However, recent findings from SBM Intelligence showed that Nigerians are among the most overtaxed in the world, and this is important.

 

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