Add VAT to Exclusive List to Save Nigeria’s Economy, El-rufai Advised FG

Kaduna State Governor, Nasir el-Rufai has advised the National Assembly to include Value-Added Tax (VAT) on the exclusive list to save the country from economic collapse.

The governor who spoke at a Parliamentarian Lecture’ organised by the National Institute for Legislative and Democratic Studies, NLDS noted that a number of States will find it hard to perform their obligations if VAT is collected by various state governments. 

The governor stressed that in Nigeria, VAT is an effective means of survival for the country, especially now that the Nigerian National Petroleum Company (NNPC) Limited has not remitted a penny into the federation account this year.

Investors King understands that it is nine months straight that the Nigerian National Petroleum Company (NNPC) failed to remit to the Federal allocation Account (FAC).

FAC which NNPC was hitherto the highest contributor is a monthly allocation shared between the Federal Government, States Governments and Local Governments. 

Thereby, NNPC’s inability to remit to the federal allocation has significantly affected allocation due to the three tiers of government. 

In addition, it could be recalled that Rivers State which was later joined by Lagos and Ogun State governments instituted a suit against the Federal Government on the collection of Value Added Tax (TAX).

The suit prayed that the court should allow state governments to collect Value Added Tax in their respective domain. 

If the court ruled in favour of the state governments, it would further decrease the monthly allocation. Thereby, states with low internally generated revenue might be financially constrained in meeting their obligations. 

“Value Added Tax has become a major source of survival for this country because this year, the NNPC has not brought a penny to the federation account; we’ve been relying on taxes, particularly Value Added Tax and the fact that Value Added Tax is not on the exclusive list is a major source of concern for the fiscal health of the federation and I think this National Assembly can do something about in its last six months,” the governor said at the event.