The VAT collection imbroglio | The Guardian Nigeria News - Nigeria and World News

A few days ago Nigerians were greeted with the announcement that a high court sitting in Port Harcourt, Rivers state has granted Rivers state the right to collect Value Added Tax , a tax hitherto collected by the Federal Inland Revenue Service . The FIRS is a Federal Government agency that is saddled with the responsibility to collect VAT on behalf of the FG and states.

According to Investopedia, VAT is a consumption tax that is levied on a product repeatedly at every point of sale at which value has been added. It is charged at the rate of 7.5 per cent on goods and services that is usually termed luxury in nature. It is divided into three parts non-import VAT local non-import VAT for foreign and Nigerian Customs Service Import VAT.

Those against agitating governors have claimed that decentralizing VAT collection is not the best citing lack of appropriate structure, manpower and seamless process for effective collection as a reason. This argument in my opinion may not hold water as most IRS offices of states are as good as FIRS. Rivers and Lagos state for instance maintains an IT compliant revenue collection system and annexing it for VAT collection would not be a problem.

A few, however, have misinterpreted VAT collection decentralization to mean secession. This is a capital No!!! Nigeria is our country and it is within the civic right of every citizen to act positively in keeping its sanctity. When proponents of VAT collection decentralisation clamour for SG collection on the premise that the current model further weakens the creativity and innovation potentials of SGs, it does not insinuate secession.

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