Director-General of Progressive Governors Forum, PGF, an umbrella body for governors elected on the platform of the ruling All Progressives Congress, APC, Dr. Salihu Moh’ Lukman, has described as retrogressive politics the clamour by some State governors to control collection of Value Added Tax, VAT, in Nigeria.
Lukman stated that if the reason behind the clamor for decentralized control of VAT collection is based on divisive, ethnocentric injustice, then it is retrogressive politics which is a complete departure from the progressive politics which the APC stands for.
Rivers State Governor, Nyesom Wike had sued and secured court judgment against the Federal Inland Revenue Service, FIRS, over the right of the State to control the collection of VAT.
Wike lamented injustice and inequitable distribution of resources generated from VAT, arguing that ‘Rivers State generated about N15 billion as VAT in June 2021 but received only N4.7 billion, Lagos State generated over N46 billion as VAT in June, but got just over N9 billion, whereas Kano State generated N2.8 billion and also got N2.8 billion as allocation.’
In his statement titled, ‘Retrogressive Politics of Value Added Tax in Nigeria’, issued Friday and made available to newsmen in Abuja, the APC chieftain wondered if State collection of VAT was going to prioritise the development of the nation’s productive capacity or rather simply be about consuming the resources that are currently available, stressing that access may not necessarily translate into commitment to utilise the resources in ways that strengthened commitment of political leaders to invest in the development of Nigeria’s productive sector.
He emphasized that if the priority is about consuming currently available resources, commitment of political leaders to mobilise investment to develop the nation’s productive sectors will be weak, hence it is important to ensure that access to resources also come with increased commitment by political leaders towards developing Nigeria’s productive sector.
The PGF DG maintained that the reason Nigerians are debating whether it is states or federal government that should collect VAT is as a result of significant increase in what is being generated from VAT, thereby making it an attractive variable in the struggle for resource control by State governments.
Lukman boasted that the APC government led by president Muhammadu has tremendously increased VAT from N759.43 billion in 2015 to N1.531 trillion in 2020, an increase of more than hundred percent.
He berated the opposition Peoples Democratic Party, PDP, for generating very low income from VAT on account of both combination of weak institutional capacity and corruption in the public sector during its 16 years reign in power.
“No matter what anyone want to say, the reality is that the significant increase in VAT in the country between 2015 and 2020 confirmed improved efficiency and reduced corruption in the process of collection and management of Nigeria’s public finances.
“The reality however is that credit must go to the APC led federal government of President Buhari. Whether it would have been possible if PDP is still in control of the federal government can only be wishful thoughts. If that were to be the case, why wasn’t it the case at any point between 1999 and 2015?,” he asked.
Lukman added that, “Governor Wike can audaciously and shamelessly talk about VAT today because, its value has significantly increased which made it attractive for a rich State like Rivers to be interested in controlling it. If Governor Wike has any morality, he should look back and acknowledge how small Rivers must have received as its VAT share before 2015. Being a leading member of PDP, what was responsible for the low VAT records in the country between 1999 and 2015?
“As members of APC, it is important that Governor Wike is reminded that the current increased record of VAT collection in the country is made possible only because the PDP is no longer in power. If PDP were to be in power the fact of inefficiency and corruption in the process of collection and management of VAT would have continued and the amount collected would have remained relatively low. It is not by accident that VAT collection in the country significantly increased under APC led federal government. This is because one of the specific commitment of APC since 2015 as outlined in the section of the party’s manifesto Funding a New Nigeria was that ‘APC government will set about the urgent task of getting Nigeria’s public finances in order, by tackling the massive waste, duplication and corruption in the system, diversifying the economy and expanding our tax base to increase non-oil revenues, and reprioritising public spending away from bureaucracy towards investment in infrastructure and improved frontline services.’”
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