VAT war and the clamour for new states

Although the heavens did not fall last week when Rivers State Governor Nyesom Wike ordered the collection of Value Added Tax (VAT) from corporate entities and individuals in the state, one could see a jolting table.

His order followed a judgment by the Federal High Court sitting in Port Harcourt, which held that the state government has the powers to collect VAT within its territory, a matter the Federal Inland Revenue Service (FIRS) is already appealing at the Appeal Court.  Lagos State is also toeing that path. The ‘civil service states’ are already jittering.

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Wike’s position is a clear indictment of the process that distributes resources to the 36 states of the federation. His analogy seems simple to understand and perhaps, such would help in interpreting the agitations from his region and by extension, other regions.

The governor’s claim that Rivers got N4.7bn after generating N15bn and Kano having N2.8bn equal to her allocation within the same time frame seems illogical to many people.

To affirm Wike’s claim, some states rushed to beg for mercy. From Gombe’s “be your brother’s keeper” to Kogi’s  “God did not create us equally,” more dust will be on air soon. But 25 per cent of what one generates and 100 per cent of what the other generates isn’t within brotherhood or God-consciousness, it is a mystery that needs clarification.  Rivers and Lagos may not win the case, but a new negotiation will begin logical negotiation.

If states in existence for more than 20 years could be humbled to beg another state for survival, what do we say of new states we are clamouring for; how would they survive without free money?  If Rivers and Lagos win, other buoyant states will follow suit; doom time for weak states. We may have to create GoFundMe account for some regions that want more splits.

Uthman Qasim [email protected]