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VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries - Politics - Nairaland

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VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by divinehand2003(m): 6:52am On Sep 13, 2021
Five northern states, two south-western states, two south-south states, and one south-eastern state collected a total of N373.84bn of the N836.51bn Value Added Tax allocation available for states in 14 months.

This is according to the latest FAAC allocation data available from the National Bureau of Statistics for the months of January 2020 through to February 2021.

In the period under review, the thirty-six states of the federation and the Federal Government shared N1.09tn as VAT revenue from the Federation Accounts Allocation Committee.

The top 10 states were: Lagos (N153.94bn), Kano (N32.48bn), Oyo (N29.85bn), Rivers (N28.43bn), Kaduna (N24.75bn), Katsina (N22.72bn), Delta (N20.91bn), Bauchi (N20.49bn), Anambra (N20.14bn), and Jigawa (N20.13bn).

Lagos got the largest share of VAT revenue in the period under review (N153.94bn), while Nasarawa got the least allocation of N15.36bn.

Based on the regions, the South-West region received the highest VAT allocation (N256.21bn), followed by the North-West (N154.41bn), South-South (N119.88bn), North-East (107.43bn), North-Central (N106.58bn). The South-East received the least from the VAT allocations (N91.99bn).

The bottom 10 states were Nasarawa (N15.36bn), Bayelsa (N15.79bn), Taraba (N16.23bn), Gombe (N16.33bn), Kwara (N16.35bn), Ekiti (N16.46bn), Yobe (N16.90bn), Abia (N17.03bn), Ebonyi (N17.04bn), and Cross River (N17.17bn).

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. In Nigeria, VAT is collected by the Federal Inland Revenue Service and shared by the Federal Government.

According to data from the NBS, VAT has a non-import VAT local, non-import VAT for foreign, and Nigerian Customs Service Import VAT components.

In 2020, N1.53tn was generated as VAT in the nation. Non-import VAT local accounted for N763bn, non-import VAT for foreign accounted for N420.43bn, and NCS-Import VAT accounted for N347.72.

Locally derived tax accounts for about 50 per cent of total VAT, while imported goods and foreign goods or services not imported account for the other half. Local VAT is imposed on goods and services consumed within each state of the federation.

Based on the country’s revenue sharing formula, the Federal Government gets 15 per cent of VAT, while states share 50 per cent, and local governments share 35 per cent based on the sharing formula. In the period under review, the Federal Government got N251.55bn from VAT.

In an August 10 ruling, the Federal High Court sitting in Port Harcourt, Rivers State, declared that it was the Rivers State Government, and not the Federal Inland Revenue Services, that should collect VAT and Personal Income Tax in the state.

In 2020, the total internally generated revenue of the 36 states in Nigeria was N1.21tn.

A former Minister of Finance, Mrs Kemi Adeosun, had said 55 per cent of total local VAT was generated in Lagos.

Based on this indication, in 2020, Lagos may have contributed N419.65bn. in the same year, however, it received N130.97bn.

The Governor of Rivers State, Nyesom Wike, said recently that Rivers State generated N15bn VAT revenue in June this year, but got only N4.7bn. He added that Kano generated N2.8bn in the same month and got the same N2.8bn back.

Wike also said that Lagos generated N46.4bn but received N9.3bn.

The Director-General, Lagos Chamber of Commerce and Industry, Dr Chinyere Almona, on Sunday said the current sharing formula for the states and LGAs should be adjusted using the factors of equality 20 per cent, population 30 per cent, and derivation 50 per cent.

This is against the present system of equality 50 per cent, population 30 per cent, and derivation 20 per cent.

According to her, this arrangement should be agreeable to the concerned parties and can drive innovation on revenue generation in all the states towards increasing their internally generated revenue.

She added that it would also make the states more sensitive to the needs of businesses in their respective jurisdictions.

Almona said, “The first concern of the chamber is the confusion that businesses face as to who is in charge of VAT collection. This is not healthy for the business community and planning.

“We, however, hail the swift intervention of the Court of Appeal to reduce the uncertainties surrounding these controversies.

“Businesses should not be subjected to unnecessary hurdles and made to pay the same tax twice from different agencies.

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“The Federal Government should urgently establish an understanding with states on what is best for the nation and businesses.”

According to the Head of Economics Department, Pan-Atlantic University Lagos, Dr Lekan Aworinde, if state governments start to collect VAT, there would be some positive as well as negative outcomes.

He said, “On the positive side, states can boost their internally generated revenue, meaning that states that realise huge amounts of money from VAT will be able to generate more revenue to themselves.

“However, on the flip side, we do not know whether states will have the structure to be able to collect this tax. What I mean is that tax collection involves a lot of structures such as the policies and the tax planning; also, do these states have the manpower to collect these taxes. If they don’t, the process might not be that smooth and effective.

“Aside all of this, if the administration of VAT falls to the state, how sure are we that they will be able to remit what is due to the local governments.

“In many cases, even with the old systems when federation account allocations come in, state governments do not remit the share of local governments as expected.”

He added that there was the possibility of multiple taxations, especially on imports.

Aworinde added, “There is also the possibility of multiple taxation which can be caused when both the federal and state government charge VAT for certain items like imports. Multiple taxation will have a ripple effect on the economy.

“It will hamper ease of doing business in the country, erode investor’s confidence in the country and further decrease foreign investments, largely because investors don’t want to come into a country with too many taxes.

“With investments on the decrease, unemployment will spike, which will also pull more people below the poverty line.

“As income remains constant while cost of goods and services keep increasing, heightened poverty or a rapid increase in the poverty rate in the country is inevitable.”

Meanwhile, the Fiscal Policy Partner and Africa Tax Leader, PwC, Taiwo Oyedele, has said challenging any ambiguity or treatment the states consider inconsistent with the constitution in court, is a healthy development for the system.

Oyedele said this in an interview with one of our correspondents, in response to the states’ attorneys’ general’s prayer to the supreme court to determine whether or not the states have the sole authority to administer and collect stamp duties on all transactions involving individuals and persons within their respective states.

The PUNCH had reported that the Attorney-General of the 36 states of the federation had dragged the Attorney-General of the Federation, Abubakar Malami, before the Supreme Court over the failure of the Federal Government to remit the funds generated from stamp duties into states’ accounts.

Oyedele said, “There is generally no ambiguity regarding the collection of stamp duties. States are entitled to collect stamp duty on any dutiable instruments between individuals. Where a corporate entity is involved, the Federal Government is empowered to collect the stamp duty.

“While each state gets to keep the stamp duty collected by them, any stamp duty collected by the Federal Government is to be shared to states at 100 per cent less cost of collection based on derivation.”

In another development, an economist and private sector advocate, Dr Muda Yusuf, has advised the National Assembly and the Federal Ministry of Finance to halt the proposed excise duties on a segment of the manufacturing sector.

Yusuf said this in a statement on Sunday in response to the announcement by the Nigerian Customs Service during the 2022-2024 Medium Term Expenditure Framework assessment in the National Assembly to reintroduce excise duties on the production of soft drinks in the country.

Yusuf described the move as ill-timed, inappropriate and detrimental to the growth of the manufacturing sector, saying that it negated the economic recovery and job creation objectives of the federal government

He said, “Many upcoming small businesses in the beverage sector would be hard hit by this proposal. The millions of micro enterprises in the soft drinks’ distribution chain will be adversely impacted by the imposition of the excise tax.”

He added that the reality was that Nigerian manufacturing companies were going through tremendous stress at the moment, affecting sales, turnover, profitability, shareholder value and the sustainability of investments in the sector.
https://punchng.com/vat-five-northern-states-two-sw-two-ss-among-top-beneficiaries/

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Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Olunmercy56(f): 6:54am On Sep 13, 2021
End of the money. No developments, floods everywhere, poverty. All politicians are now looking at 2023

74 Likes 2 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by techwaya: 6:55am On Sep 13, 2021
Some states will just collapse because of this,i keep asking how can states like Borno and adamawa cope, Boko Haram ravaged state like Borno can't even go into agriculture as source of income let's restructuring shouldn't be about destroying our fellow country men..

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Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Flexherbal(m): 6:55am On Sep 13, 2021
Every state should control their resources, simple.


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Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by divinehand2003(m): 7:00am On Sep 13, 2021
The question is this, how much VAT does each states contribute annually to the over N1 trillion collected every year in Nigeria?

I am sure this will give us a fair understanding of the problems we face in this country.

103 Likes 4 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Omoluabi1stborn: 7:03am On Sep 13, 2021

The top 10 states were: Lagos (N153.94bn), Kano (N32.48bn), Oyo (N29.85bn), Rivers (N28.43bn), Kaduna (N24.75bn), Katsina (N22.72bn), Delta (N20.91bn), Bauchi (N20.49bn), Anambra (N20.14bn), and Jigawa (N20.13bn).

Gross nonsense!
How possible Katsina, Bauchi, Jigawa got more Vat than Anambra, Abia, Ondo, Ogun, Akwaibom, delta etc?

I challenge any Northerner here to tell me the industries and economy activities wey dey there!

Cc: quotasystem, Arrewa, Buckeyemedia1

210 Likes 12 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Iamgrey5(m): 7:06am On Sep 13, 2021
The south west contributes the most VAT too

Lagos Ogun and Oyo(particularly ibadan)

But why is North West collecting more than the South South that contributes the next largest Chunk.

Northerners generally don't pay tax under the current tax regime.

173 Likes 12 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Omoluabi1stborn: 7:10am On Sep 13, 2021
Iamgrey5:
The south west contributes the most VAT too

But why is North West collecting more than the South South that contributes the next largest Chunk.

Northerners generally don't pay tax under the current tax regime.

Just imagine
Bauchi, Katsina, Jigawa receiving more vat than Ondo, Akwaibom, Abia.
What kind of nonsense is that?

117 Likes 5 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Aidejay(m): 7:11am On Sep 13, 2021
Ask which states generated the VAT now, you will not see Kano and kaduna in top 10. Infact the entire north west no go dey top 15.

95 Likes 5 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by greatiyk4u(m): 7:11am On Sep 13, 2021
The VAT saga will affect everybody because states will now become serious with taxation which will affect all of us as everyone will be forced to start paying, besides, I am for states collecting the VAT so that only serious minded people will vie for elective positions

40 Likes 2 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Omoluabi1stborn: 7:12am On Sep 13, 2021

This is against the present system of equality 50 per cent, population 30 per cent, and derivation 20 per cent.

Just imagine! How can you share vat money based on 50% equality while derivation is 20%

Population now 30% reason why the north keeps chucking out large populations after receiving 50% based on equality



The era of monkey they work, baboon dey chop is over.
They should use their population to generate vat angry angry

129 Likes 6 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by SmartPolician: 7:14am On Sep 13, 2021
This is the beginning of the end of the feeding bottle syndrome. Again, this is the time to know how smart or dull the northern and South East governors are. They must think out of the box to be able to run their states. For instance, el-Rufai is doing a great job with IGR improvement in Kaduna. Others have to take a cue from him.

After VAT, some other governor should sue for a total resource control and another should go for state police. We need to empty the so-called exclusive list. People who are not intelligent and creative shouldn't have any business with politics. The revolution has already begun.

115 Likes 8 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Iamgrey5(m): 7:14am On Sep 13, 2021
Omoluabi1stborn:


Just imagine
Bauchi, Katsina, Jigawa collecting more than Ondo, Akwaibom, Abia.
What kind of nonsense is that?
I really want to know what is being done in Jigawa.

I can't recall any industrial activity of note in the state.

I am even willing to allow Bauchi and Kastina stand for the sake of argument but what's the rationale behind Jigawa if not for the rigged population census.

41 Likes 2 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by system21: 7:16am On Sep 13, 2021
The current sharing formula by federal government is making so many states lazy, majority of governor in Nigeria are not even qualified to be town union president not talk about governor

69 Likes 5 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by pinkyruledworld(m): 7:16am On Sep 13, 2021
Hmm. Lets each region develop their region with the money made in the region. This one that they are using south to develop the north is a no no.

Revolution incoming, pple are getting crazy and wising up

32 Likes 1 Share

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Xscape047: 7:16am On Sep 13, 2021
E B things
Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Omoluabi1stborn: 7:16am On Sep 13, 2021
Iamgrey5:
I really want to know what is being done in Jigawa.

I can't recall any industrial activity of note on the state.

I am even willing to allow Bauchi and Kastina stand for the sake of argument but what's the rational behind Jigawa if not for the rigged population census.


Exactly
This is against the present system of equality 50 per cent, population 30 per cent, and derivation 20 per cent.

Population now 30% reason why the north keeps chucking out large populations after receiving 50% based on equality.
While derivation is 20%

3 Likes 2 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Matheusmartin: 7:16am On Sep 13, 2021
.....
The north has always been backward.
Seeking every opportunity to leech the south...

It was their underdevelopment that prompted the colonial Marsters to join the two regions and admister them as one.

47 Likes 2 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by richiemcgold: 7:17am On Sep 13, 2021
jigawa bawo?

7 Likes 1 Share

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Passionate888: 7:17am On Sep 13, 2021
Let's be our brother's keeper grin grin grin grin

4 Likes

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Sonnobax15(m): 7:17am On Sep 13, 2021
grin
Just imagine the kind formula wey aboki dey use dey scam us all these while.......

Chaiiii,may God continue to bless Odogwu Wike for opening their nyashes lipsrsealed

Make north convert their population into wealth... Simple cheesy

24 Likes

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by EricSmallz(m): 7:18am On Sep 13, 2021
Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Nobody: 7:18am On Sep 13, 2021
Where is South East?

1 Like

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by Weduim: 7:18am On Sep 13, 2021
Hmm
Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by LeeSantos(m): 7:18am On Sep 13, 2021
...nothing to say for now.
I heard some Yorba elite are saying yorubas would not benefit of the country divides.

Blacks and greed

6 Likes 1 Share

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by proeast(m): 7:19am On Sep 13, 2021
This madness of robbing Peter to pay Paul must be stopped immediately. What are poverty stricken and barren states like Jigawa, Katsina and Bauchi doing in top ten VAT earning states when they generate next to nothing??

I repeat, this madness must be stopped now. Let everyone earn what they produce!!!

38 Likes 2 Shares

Re: VAT: Five Northern, Two South-west, Two South-South States Top Beneficiaries by greenie77: 7:19am On Sep 13, 2021
greatiyk4u:
The VAT saga will affect everybody because states will now become serious with taxation which will affect all of us as everyone will be forced to start paying, besides, I am for states collecting the VAT so that only serious minded people will vie for elective positions

Let them be serious with taxation and let the masses be more serious with electing credible people into office, who would not mismanage the tax they are paying.

29 Likes 3 Shares

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