The Yoruba Summit Group, the umbrella body for all Yoruba groups, and a Senior Advocate of Nigeria (SAN) and human rights lawyer, Mr. Femi Falana have kicked against the proposed increase in Value Added Tax (VAT) from the current five per cent to 7.5 per cent.
In a statement issued at the weekend, the Yoruba group stressed that the present and recent developments concerning the administration of VAT regime needed closer interrogation.
“Figures for Value Added Tax (VAT), as released by the Buhari’s government in 2017, which we believe have not significantly changed in recent years, have long exposed the contradictions in the Nigerian federation, where states that produce the wealth that continues to sustain the country hardly benefit from the distribution,” the group said.
“As revealed recently by notable persons from the northern parts, the 19 northern states as against the southern states of 17, produce just about 18 per cent of our total GDP, producing still a whole lot less about in VAT percentages. According to the then Finance Minister, Mrs. Kemi Adeosun, Lagos State alone, was generating 55 per cent of the VAT collected in the country, as at the year 2017.”
The statement was signed by the Publicity Secretary of the group, Mogaji Gboyega Adejumo, and the Chairman of the Steering Committee of the group, Dr. Olufemi Adegoke.
The group called for equitable VAT regime in Nigeria, insisting that the federal government can generate additional revenue to plug the holes in public finances occasioned by the falling VAT receipts by first adequately policing the porous borders of the northern parts, adding that it is obnoxious, scandalous to see the height of smuggling activities that go on without checks.
The group alleged that a staggering 67 per cent of the
VAT revenue is derived from the South-west, thus denting the bogus population count upon, which federally collected revenue is allocated in Nigeria.
It suggested that the State Internal Revenue Service (SIRS) should administer VAT and remits an agreed percentage not more than 50 per cent to the central government as it was the case under the 1963 constitution.
The group charged the federal government to rework its VAT strategies along these lines.
On his part, Falana said the proposed VAT increase by the federal government is in violation of the law if the National Assembly has not passed a bill to that effect.
The senior lawyer in a statement yesterday urged the federal government to propose a money bill to the National Assembly before the implementation of the increase.
“It’s illegal, under a democratic dispensation you cannot impose a tax or increase tax without a law made by the National Assembly or the state assembly as the case may be,” he told News Agency of Nigeria (NAN) in Abuja.
“In this case, it has to be realised that we are not under a military dictatorship.
“By virtue of section 59 of the Nigerian Constitution, any increase, levy or tax will have to be presented to the National Assembly by way of money bill by the president, it has to be passed into law.”
He urged the federal lawmakers to insist on passing a law before the proposed increase can be implemented.