A former Secretary to the Government of the Federation, Babachir Lawal, has stated that the Northern states in Nigeria would have earned more revenue from the agricultural products and livestock if levies were introduced on them.
Lawal, in a press statement on the controversy of the tax reform bill stated that those who support the bill view the opposition of the North due to their laziness and parasites that benefit but not contribute meaningfully to the Nigerian project.
Babachir, who condemned the alleged thinking among Southerners, argued that much of the foodstuffs and livestock consumed in the South were produced and brought in from the North and placing levies on them would have earned the North more revenue, which the south earns after processing them into other products.
“I have been studying the arguments making the rounds on the tax reform bills. The North has come out studiously in opposition to the bills; in particular, the provisions as regards VAT collection and distribution have been most contentious. The South on its part, arguably with few exceptions, has come out vociferously in support of the bills not minding the fact that most of their states are in the same basket with the Northern states.
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“This vapid opposition to the Northern position by a majority of the Southerners is motivated by a disdain for everything North and a sort of morbid fascination with and support of everything that does not favor or hurts the North. The Southerners’ argument is that Northerners are lazy, blood sucking parasites.
“Now, I want to use the case of Adamawa State (where I come from) as part justification of the Northern position on the VAT debate as I perceive it. Every week, over 30,000 cattle are sold in the various international cattle markets in the state. These cattle are transported out of the state to the South where they are processed into gala, sausages, raw beef, etc, to be sold in the supermarkets that subsequently charge VAT. The VAT earned is then attributed to the Southern states of value-addition rather than Adamawa State where the raw material (the cows) originate from. Were Adamawa to charge a levy of N5,000. 00 per cow, it would earn at least N7.8 billion per annum from such levy.
“Similarly, over 90% of the nearly 1 million metric tons of paddy rice produced by farmers in Fufore, Numan, Demsa, Lamurde, Shelleng, Yola North, Yola South, Girei etc, end up in rice mills located outside the state where they are milled and sold, VAT inclusive, which VAT is then attributed to the Southern states of value-addition or company headquarters, which then aggregates the VAT from the nationwide branch offices and then remits it to FIRS as if the VAT was generated in state of location of the headquarters alone.
He noted that a levy of N50,000 per ton of rice paddy would result in a revenue of N50 billion per annum with similar computations can be made for maize, beans and sorghum, which based on 2023 farm yield data, would yield the state an estimated annual revenue of over N100 billion, N20 billion and N10 billion respectively.
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