By Chioma Iruke
Northern Governors in Nigeria have conveyed an emergency meeting over the sharing of Value Added Tax (VAT) and other issues.
The meeting hosted by the Kaduna State Governor, Nasiru El-Rufai in his state, is to be chaired by the Chairman of the Northern Governors Forum and Governor of Plateau State, Simon Lalong.
Recall, that Nigerian southern states and the country’s tax collection agency, the Federal Inland Revenue Service (FIRS) have been at loggerheads over the collection of VAT with Lagos and Rivers states being at the forefront.
A Port Harcourt Court had in August ruled that Rivers State had the right to collect its taxes, a ruling which was appealed by the FIRS.
Lagos and Rivers states Houses of Assembly have since passed bills empowering the state government to collect VAT in their states.
Despite the federal government currently collecting 7.5% as VAT, the law passed by the Lagos State House of Assembly empowers the states to charge VAT at the rate of six percent on the value of goods and services in the state.
It states that “the value of taxable goods and services shall be determined in the following ways: where the supply is for a money consideration, its value shall be deemed to be an amount which with the addition of the tax chargeable is equal to the consideration.”
The law further states that revenue accruing from VAT would be shared on a ratio of 75 percent to 25 percent between the state government and the Local Government Council Areas.
But Nigeria’s Attorney-General and Minister of Justice, Abubakar Malami, has held that no state has the right to collect national taxes.