Udom Emmanuel: Decentralisation of VAT collection will favour every state

September 23, 2021 2:30 pm

Udom Emmanuel, governor of Akwa Ibom state, says the decentralisation of value-added tax (VAT) collection “will favour every single state” in the country.

In recent weeks, the Federal Inland Revenue Service (FIRS) has been in a legal tussle over VAT collection with Rivers and Lagos state governments.

The two states had enacted laws decentralising the collection of the consumption tax.

However, some states had also rallied in support of FIRS, kicking against the proposed disruption.

Speaking during a programme on Arise TV on Thursday, Udom said opponents of the decentralisation of VAT collection can’t envision the “hidden treasure” it will bring.

“If my brother states have gone to court, we are all one and in the same basket. All the 36 states will not need to join at the same time. As of today, my brother in Rivers has gone far enough. I don’t rush to sign that into law. For now, let me allow the rule of law. Let’s allow the rule of law to take its course,” the governor said.

“Some states saying that this is not needed is probably because people don’t see the hidden treasure in VAT. There are so many things, and we’ve discussed this at so many fora.

“For example, If I sell a house in Uyo, and the value of the property is enhanced because of good roads, electricity and security that’s been provided by the state government and when VAT is taken out of that property, why shouldn’t that tax 100% come to me? Why should I take it to go and share?

“It’s the same thing everywhere, so those who are saying that VAT cannot favour everyone; it will favour every single state in this country. There’s no exclusion at all. Because it’s a consumption tax, and whenever there are human beings, there must be activities. And where there is activity, there must be consumption, and where there is consumption, VAT follows, which will lead to revenue.”

Between January and August 2021, Akwa Ibom generated N8.36 billion in VAT. In that same period, the state received N27.75 billion in VAT revenue from the federation accounts allocation committee (FAAC).