VAT. The North should not panic.

For example, take the daily business of our of animals.

Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

In Lagos alone, about 3000 cows are eaten daily, 100 percent of which come from the north.

A mature cow's meat weighs 250 kg, and each 1 kg is sold for ₦7500 (₦525 VAT).

If you multiply ₦525 of beef per cow (250kg) that is ₦131,250 VAT per cow.

If you multiply the amount of what is used in Lagos that will generate ₦393,750,000 daily.

The total VAT received every day in Lagos alone (₦393,750,000) number of days in a year (365) will give us 'one hundred and forty-three billion, seven hundred and eighteen million, seven hundred and fifty thousand' (₦143,718,750,000 ).

This is only meat and only in Lagos other things like rice, vegetables and even onions are not mentioned.

The north is better than it seems. If we choose not to be lazy that is up to us, but we can do better.

Bandirao:
VAT. The North should not panic.

For example, take the daily business of our of animals.

Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

In Lagos alone, about 3000 cows are eaten daily, 100 percent of which come from the north.

A mature cow's meat weighs 250 kg, and each 1 kg is sold for ₦7500 (₦525 VAT).

If you multiply ₦525 of beef per cow (250kg) that is ₦131,250 VAT per cow.

If you multiply the amount of what is used in Lagos that will generate ₦393,750,000 daily.

The total VAT received every day in Lagos alone (₦393,750,000) number of days in a year (365) will give us 'one hundred and forty-three billion, seven hundred and eighteen million, seven hundred and fifty thousand' (₦143,718,750,000 ).

This is only meat and only in Lagos other things like rice, vegetables and even onions are not mentioned.

The north is better than it seems. If we choose not to be lazy that is up to us, but we can do better.

It's a sound idea, though you have to consider the cost refrigeration, and specialised transportation to preserve the meat and make sure they are still fresh when the get to Lagos.

They also have to factor damages, for meat they are unable to sell on time..etc

But truly it is a sound idea

Bandirao:


Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

The north is better than it seems. If we choose not to be lazy that is up to us, but we can do better.

Lol this VAT will turn herdsmen to ranchers. I predicted establishing state prisons and police will. Who knew taxes will do the work instead.

Front Page: Mynd44 Lalasticlala

If they stop selling cows to Lagos and Lagos decided to buy from Benin Republic , will they eat their cows...... anyhow they are still the losers

lamentor78:
If they stop selling cows to Lagos and Lagos decided to buy from Benin Republic , will they eat their cows...... anyhow they are still the losers

Lol everything is a zero sum game to you guys. He stated they should sell beef instead of cows. This is mutually beneficial to most parties. The only loser is butcher who loses a supplier in this hypothetical.

loffyloffy:


It's a sound idea, though you have to consider the cost refrigeration, and specialised transportation to preserve the meat and make sure they are still fresh when the get to Lagos.

Herdsmen will turn into truckers and butchers. Watch how police extortion on roads will suddenly become a national issue.

They have zero plans to develop or industrialize so reject any move that rewards developed states for their effort in accommodating industries.

Bandirao:
VAT. The North should not panic.

For example, take the daily business of our of animals.

Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

In Lagos alone, about 3000 cows are eaten daily, 100 percent of which come from the north.

A mature cow's meat weighs 250 kg, and each 1 kg is sold for ₦7500 (₦525 VAT).

If you multiply ₦525 of beef per cow (250kg) that is ₦131,250 VAT per cow.

If you multiply the amount of what is used in Lagos that will generate ₦393,750,000 daily.

The total VAT received every day in Lagos alone (₦393,750,000) number of days in a year (365) will give us 'one hundred and forty-three billion, seven hundred and eighteen million, seven hundred and fifty thousand' (₦143,718,750,000 ).

This is only meat and only in Lagos other things like rice, vegetables and even onions are not mentioned.

The north is better than it seems. If we choose not to be lazy that is up to us, but we can do better.

The intestines, legs, head and bones dont go for N7,500 a KG. Stop sweetening things to sell a point. They should embrace productive lifestyle. The FG gives over a N1Tr assistance to the farmers(largely northerners) yearly. That too can be cut off by the south through unrest in SS.

lamentor78:
If they stop selling cows to Lagos and Lagos decided to buy from Benin Republic , will they eat their cows...... anyhow they are still the losers

sorry to say but you sounded like a bigot to me, and what is more benin Republic don't even have livestock to feed themselves talkess of exporting to big cities like lagos and port Harcourt.

Good idea

Nice one op..

A good idea

CodeTemplarr:
They have zero plans to develop or industrialize so reject any move that rewards developed states for their effort in accommodating industries.

it is our useless governanors that get spoiled by the federal government oil money every governor is doing anyhow since he know at the end the burden will fall on the central government, iam a Northerner and in full support of this tax reform this will heavily check our governors once they discovered that they don't have a revenue to even pay workers salaries they will go back to their sense and do the needfull if they don't their people will suffer and they will start holding them accountable for their deeds,the north is not poor only mismanagement and insecurity is bringing us this wahala we have the largest population of livestock in West Africa and also the most fertile lands that grow every crops even temperate crops are found to flourish in Northern Highlands, such and assets is rarely occurring in most countries of the world.

CodeTemplarr:
They have zero plans to develop or industrialize so reject any move that rewards developed states for their effort in accommodating industries.

There willingness isn't of consequence. Change is coming they'll have to adapt. There's nothing stopping any state from going to the Supreme Court to settle the VAT issue. It's not in the exclusive list so any state can change whatever they please. Then you have to consider the fact if and when state policing happens herdsmen are public enemy number one. Open grazing laws will be enforced whether the FG wants to assist or not. This is a no win scenario for them.

This is the kind of discussion we should be having .
The bill doesn’t have to sail through but Nigerians must keep discussing . We must find home grown solution to our problems .
That is how to build a country .

The VAT talk is taking too long . VAT is no longer in the exclusive list . Lagos and Rivers should go back to the court room .

The next is state police . The killer herdsmen must be checked .
The ban on Open grazing would be implemented 100 percent .

You can charge 50 percent VAT on cow meat if you like but our farms would no longer be trampled upon by your cattles .

Niger Delta should get more from their oil . Let’s pay 40 percent to the center .

Overall, it’s a win win for everybody .

A restructured Nigeria is to the benefit of all.

Well, with the proposed tax bills, VAT goes to where goods are consumed and not where they are produced. So all the monies calculated by the Op will still go to where the processed beef is consumed. Therefore the premise of your argument is already faulty. Moreover, VAT may also not be charged on food products.

We can intensify agriculture and build industries if can we get serious, it's not about cows and beef, a successful society should diversify and that's what we should do.

Sannisege:
Well, with the proposed tax bills, VAT goes to where goods are consumed and not where they are produced. So all the monies calculated by the Op will still go to where the processed beef is consumed. Therefore the premise of your argument is already faulty. Moreover, VAT may also not be charged on food products.

That's means they'll have to opt for a state vat or sales tax. I'm sure vats not on the exclusive list. This also gives them an opportunity to tax food exclusively at whatever rate they please. The federal government can ignore certain items and let that be state issue.

In abroad plus south Africa self they have refrigerated truck and good roads. Imagine trying to transport processed meat from kano to lagos and the truck gets stuck on the road for 3 days hahahah.

Nigerians are also used to eating fresh meat, why will they want packaged ones?. The state government should levy livestock leaving their states ( i believe they do this already).

In many countries cow skin is more expensive that meat, what stops the north from reviving the leather industry and sell to Italy or China?

You don't seem to understand how VAT works.

VAT is a consumption tax. It is based on where a product is purchased/consumed, not who produced it or where it is produced..

Based on the Lagos cow trade scenario you outlined, all the VAT should to Lagos State, not the cattle rearers or the State where the cattle were raised.

However, under Mr Tinubu's tax bills, instead of Lagos getting all the VAT from your scenario, Lagos will only get 60% with the remaining 40% shared to other states and so other states will benefit from Lagos's own VAT.

So Lagos will actually lose 40% of what it should be entitled to.

If any state should be complaining against the bills, it is states like Lagos, Rivers, Oyo etc, not Northern States.

But if Northern senators succeed in blocking the bills, no problem. All it needs is for a State in the South to return to Court for affirmation that each State can pass their own VAT laws.

Remember, Mr Wike went to court and tge court ruled that Federal government cannot collect VAT on behalf of States. It was Northern Governors that begged Mr Wike not to continue with the matter then.

Like I said if Northern Governors block the bills, no problem.

Lagos, Rivers and any other State that is interested will put processes in place to start collecting their VAT locally.

In that scenario, Lagos, Rivers, Oyo etc will keep 100% of the VAT generated within their respective territories. These states will be rolling in unprecedented revenue, while most other states will lose out.

You prefer that? No problem. Go ahead and block the bills which are fairer and even better for your states, since at 40% of all VAT generated in States like Rivers and lagos will be redistributed to other states.

The level of misinformation by many of the Northern leaders on these bills is just unbelievable.

To buttress my point about VAT being a consumption tax, here is an example:

If Nigerian brewery produces Guilder in Lagos State, and distributes some to Kwara State.

Lagos State can only claim VAT on Guilder bought/consumed in Lagos.

It cannot claim the VAT for Guilder distributed to or consumed in Kwara. The VAT on the Guiness sold within Kwara will go to Kwara State.

So, it is not about where a product is produced, it is all about where the final consumption happens.

So, you will only be entitled to VAT on the consumption that happens in your State, which is fair. Nobody is cheated.

But in order to ensure even more fairness, under Mr Tinubu's tax bills, each State will only be entitled to 60% (instead of 100%) of the VAT generated within each State.

So Mr Tinubu is effectively shortchanging States like Rivers, Oyo, Lagos etc while favouring poorer States.

Instead of northern leaders being totally against the bills, an outcome which will result in an even worse situation for their States, a more astute position would be to negotiate for the proportion of VAT to be redistributed to all States to be increased from the proposed 40% to may be 50%.

DeLaRue:
You don't seem to understand how VAT works.

VAT is a consumption tax. It is based on where a product is purchased/consumed, not where or who produced the product.

Based on the Lagos cow trade scenario you outlined, all the VAT will go to Lagos State, not the cattle rearers or the State where the cattle were raised.

How is that the case if the beef was purchased in let's say Kano at wholesale location then transported to Lagos at retail store. Is VAT not charged at each point in the supply chain? Why are they not both getting taxed? This sounds like a sales tax when only the final customer pays whatever the tax is.

Bandirao:


Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

To be fair @ Bandiaro, VAT is a bit complex, but I will try and explain it.

From your scenario, my understanding is that the wholesaler will pay VAT (currently 7.5%) to the meat processing factory in Kano, but the wholesaler will be able to claim the VAT back (get a refund) from the FIRS since it is not the final consumer. Because it can claim it back, the VAT has not crystalised at that point, so the government has effectively not made/generated the revenue at that point.

Once the wholesalers transports the meat to and sell to retailers in Lagos, the wholesaler will include VAT (7.5%) as part of the price to be paid by the retailer.

Once the retailer sells to the consumers, the retailer too can go to FIRS and claim a refund of the 7.5% VAT that was included in the price it paid to the wholesaler.

As you can see, both the wholesaler from Kano, and the retailer in Lagos, can claim back the VAT they paid, which means they have not really lost anything to VAT.

The retailer will also include 7.5% VAT in the price it sells to its Lagos customers/consumers.

However, unlike the wholesaler and the retailer, the consumer will not be able to claim back the VAT from FIRS.

So, effectively, it is the consumer that actually pays VAT.

That is why it is effectively a consumption tax.

Have you noticed that businesses have been quiet about the VAT tax bills That's because they are not the ones paying the tax. Whatever they pay as VAT to other businesses, they will be able to get a refund from FIRS.

You might wonder, why is the government introducing VAT - a new tax.

It is actually not a new tax. We have been paying VAT in one form or another since the military era.

Whether it is a phone handset, call credit or data, bottle of coke, soap, dstv subscription and several other products and services, VAT is already included in the prices. You just didn't know it.

The new VAT bill is mainly to change the way the money derived from VAT is shared between the States and Federal government.

DeLaRue:
To be fair @ Bandiaro, VAT is a bit complex, but I will try and explain it.

From your scenario, my understanding is that the wholesaler will pay VAT (currently 7.5%) to the meat processing factory in Kano, but the wholesaler will be able to claim the VAT back (get a refund) from the FIRS since it is not the final consumer. Because it can claim it back, the VAT has not crystalised at that point, so the government has effectively not made/generated the revenue at that point.

Once the wholesalers transports the meat to and sell to retailers in Lagos, the wholesaler will include VAT (7.5%) as part of the price to be paid by the retailer.

Once the retailer sells to the consumers, the retailer too can go to FIRS and claim a refund of the 7.5% VAT that was included in the price it paid to the wholesaler.

As you can see, both the wholesaler from Kano, and the retailer in Lagos, can claim back the VAT they paid, which means they have not really lost anything to VAT.

The retailer will also include 7.5% VAT in the price it sells to its Lagos customers/consumers.

However, unlike the wholesaler and the retailer, the consumer will not be able to claim back the VAT from FIRS.

So, effectively, it is the consumer that actually pays VAT.

That is why it is effectively a consumption tax.

Have you noticed that businesses have been quiet about the VAT tax bills That's because they are not the ones paying the tax. Whatever they pay as VAT to other businesses, they will be able to get a refund from FIRS.

The federal government created a convoluted sales tax if your statement is factual. If everyone can claim it except the end consumer it's a sales tax. I see why the Northers would be upset. Every example I read is shows each leg of retail process subtracting previous tht VAT payment.

Are you sure it's not a refund on certain business expenses you can get a refund on? This would make more sense.

Bandirao:
VAT. The North should not panic.

For example, take the daily business of our of animals.

Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

In Lagos alone, about 3000 cows are eaten daily, 100 percent of which come from the north.

A mature cow's meat weighs 250 kg, and each 1 kg is sold for ₦7500 (₦525 VAT).

If you multiply ₦525 of beef per cow (250kg) that is ₦131,250 VAT per cow.

If you multiply the amount of what is used in Lagos that will generate ₦393,750,000 daily.

The total VAT received every day in Lagos alone (₦393,750,000) number of days in a year (365) will give us 'one hundred and forty-three billion, seven hundred and eighteen million, seven hundred and fifty thousand' (₦143,718,750,000 ).

This is only meat and only in Lagos other things like rice, vegetables and even onions are not mentioned.

The north is better than it seems. If we choose not to be lazy that is up to us, but we can do better.

You have more rivers with dams that generate electricity, what is the cost of 1Kw electricity and the VAT? We never talk of solid minerals, foods if well packaged and value added to it.
Common everyone will win if we shrug off laziness, corruption, and encourage good governance and lean concept in management of public funds.

Quite an educative thread, can the Mod push this to the front page for more input.

Bandirao:
VAT. The North should not panic.

For example, take the daily business of our of animals.

Stop selling them cows, chickens or goats to any southern state for meat. Cut them from your states and package them and charge VAT

In Lagos alone, about 3000 cows are eaten daily, 100 percent of which come from the north.

A mature cow's meat weighs 250 kg, and each 1 kg is sold for ₦7500 (₦525 VAT).

If you multiply ₦525 of beef per cow (250kg) that is ₦131,250 VAT per cow.

If you multiply the amount of what is used in Lagos that will generate ₦393,750,000 daily.

The total VAT received every day in Lagos alone (₦393,750,000) number of days in a year (365) will give us 'one hundred and forty-three billion, seven hundred and eighteen million, seven hundred and fifty thousand' (₦143,718,750,000 ).

This is only meat and only in Lagos other things like rice, vegetables and even onions are not mentioned.

The north is better than it seems. If we choose not to be lazy that is up to us, but we can do better.

Nice idea but unfortunately they prefer grazing from north to South killing innocent farmers

The day the North starts implementing this madness you recommended, you will realise that Southern states can also rear animals and churn out farm produce.

Southern governors abandoned agriculture because they are focusing on their areas of comparative advantage. However, a state like Enugu is massively investing in agriculture now.

SmartPolician:
The day the North starts implementing this madness you recommended, you will realise that Southern states can also rear animals and churn out farm produce.

Southern governors abandoned agriculture because they are focusing on their areas of comparative advantage. However, a state like Enugu is massively investing in agriculture now.

you get me wrong It is to our best advantage that every region to put a serious effort in the area they have a comparative advantage. This is called specialisation the north the north has by far the greatest advantage over south when it comes to Agriculture borno state alone is larger than the whole South East and Niger and kaduna combined are larger than the whole the whole southwest, and also the north is more fertile and tsetse fly free, the Southern soil is mainly acidic but I think they south should focus more on industries who are import intensive since they are strategically located towards coast it is to our best advantage overall for us to specialised, based on our capabilities.

Biodun556:



Nice idea but unfortunately they prefer grazing from north to South killing innocent farmers

the problem is that the federal government didn't give much attention to livestock economy in Nigeria, highly associated with Fulani many whom most Nigerian have a grudges towards they seems to reject any 8policy aimed at helping the livestock ranchers, I think it is only recently that the ministry of livestock has been founded the livestock economy is previously under the ministry of agriculture which highly favour of farmers that is why the cattle herders continue their centuries old transhumace.

If you still believe that herders kill because they were not given attention, think again.

It's a land grabbing tactics.

Niger state alone is about the same size with the entire South West, no need adding Kaduna. Again it is poor education that makes people to always think that agricultural productivity is based on landmass. What is the landmass of Israel compared to Iran, Syria, Algeria or Nigeria yet can you compare your agricultural output with theirs?

After threatening north that they must accept Tinubu imposed tax, you guys are now begging them?

I like how Igbos are indifferent in the ongoing charade.

Bandirao:
you get me wrong It is to our best advantage that every region to put a serious effort in the area they have a comparative advantage. This is called specialisation the north the north has by far the greatest advantage over south when it comes to Agriculture borno state alone is larger than the whole South East and Niger and kaduna combined are larger than the whole the whole southwest, and also the north is more fertile and tsetse fly free, the Southern soil is mainly acidic but I think they south should focus more on industries who are import intensive since they are strategically located towards coast it is to our best advantage overall for us to specialised, based on our capabilities.

It seems that the southerners are fool in this country... I blame our politicians