Nigeria’s problematic, confusing tax system – Govs


• Said NGF awaiting the decision of the Supreme Court

GOVERNOR Kayode Fayemi of Ekiti State said yesterday that the Nigerian Governors Forum, NGF, is awaiting the Supreme Court ruling on value added tax, VAT and collection.

Fayemi, who is also the chairman of the NGF, said Nigeria’s tax system was not only problematic, but also confusing and needed special attention.

Speaking in an interview with Arise Television yesterday, Fayemi said governors are awaiting the outcome of the case instituted by some state governors.

He said the Governors’ Forum is currently reviewing the issues and consulting on the implications of the fundraising for state governments.

The governor said: “For us at NGF this is an issue that we are looking at both legally and politically. We ask our experts to help us consider the implications for states.

“Our point of view is that the Supreme Court should expedite the decision on this matter, so that we are clear on who should be in charge of VAT – whether it is FIRS or the States. We will wait for the Supreme Court to rule on this.

“The important thing is that our tax system is problematic, confusing and contradictory, and we need to do a lot more to start clarifying things, so that we can have more efficient ways of collecting taxes.”

Regarding President Muhammadu Buhari’s calls for debt cancellation at the United Nations General Assembly, Fayemi said the federal government borrowing was for reasons and was for specific loans.

He said: “Nigeria borrows for specific reasons. Most of what we borrow is specific. If you look at what we borrow, you will see that these are specific and very attractive loans.

Noting that the borrowing was in line with World Bank and IMF standards, the NGF chairman said, “On the other hand, you have the Chinese infrastructure loans.

We can now ask ourselves if we should be using 97% of the debt service. It is a debate that we can have.

“The problem is, why are you borrowing. Do you borrow for consumption or for infrastructure development? Buhari is to be commended for this.

“The question is, we have income problems… borrowing is a win-win situation for our country and our economy.”

Recall that the Southern Governors Forum had supported the collection of VAT by the states, and not by the Federal Inland Revenue Service, FIRS.

Recall also that the states of Rivers and Lagos had promulgated laws for the collection of VAT, as the Court of Appeal had ordered that the states maintain the status quo, pending the decision of an appeal filed by the FIRS.

The Rivers State government also asked the Supreme Court to overturn the Court of Appeal’s order to allow states to continue to collect the tax, known as consumption tax.

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