– have published data on the collection of Value Added Tax in the first eight months of 2021. The reports have shed more heat than light.published an exclusive story entitled, “Kano beats entire five South East in VAT collection.” In the tradition of the newspaper, the story was a serious attempt to explain, in numbers, the tangled mess that VAT sharing has become in recent times.
According to the report in the first eight months of this year, and I’m now quoting the exact figures published, Abia collected N2.25 billion; Anambra, N5.56 billion; Ebonyi, N17.21 billion; Enugu, N5.19 billion; and Imo, N 1.01 billion. That adds up to N31.22 billion, and not N20 billion, as the newspaper mistakenly reported.launched a counter VAT data war.
The first question that the data by the newspapers raises is which sectors delivered the sterling performance in the total VAT collection of approximately N1 trillion in eight months in 2021? Lagos, Kano, Oyo, Rivers and FCT traditionally get a higher percentage of VAT largely for historical and demographic reasons. Any data that seeks to compare collections on a state-by-state basis can hardly make sense without stating clearly which sectors are responsible for the performance. That important detail is absent in both reports.
Not only was the timing bound to yield a tendentious narrative, the decision to focus on a few outliers instead of looking at the trend over a period was also sure to produce a misleading picture. Yet, even if the data could answer all these questions, it would still be irrelevant in dealing with the most fundamental point in the VAT debate: the illegality, under the present Constitution, of the Federal Government collecting for the last 27 years, revenue which it is not authorised to collect under the law.
The recent ruling of the Federal High Court in Port Harcourt only reaffirmed what was known all along: that the Federal Government is only authorised to make tax laws and impose and collect taxes that relate to stamp duties, income tax, profits and capital gains tax, as contained in items 58 and 59 of Part 1, Second Schedule of the 1999 Constitution .
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