From Romanus Ugwu, Abuja
The Director-General of the All Progressives Congress (APC) Progressive Governors Forum (PGF), Dr Salihu Moh Lukman, has described as cheap politics, the current controversy trailing the demand by states to collect Value Added Tax (VAT).
He further argued that should Lagos and Rivers win the fight to collect VAT in their states without sharing with the federal government and other states, some states like Osun, Ekiti, Bayelsa, Ebonyi, Abia, would lose while others like Oyo, Ogun, Kano, Kaduna and Enugu, may be the surprise actual gainers.
In a statement he issued in Abuja on Friday, the PGF DG hinged the increase in the agitations for states to collect VAT on the spiral increase in the collection of the tax.
He stressed that the agitations would not have been possible under the administration of the Peoples Democratic Party (PDP) because of the inefficiency and corruption in the process of collection and management of VAT.
Writing under the title; “Retrogressive politics of VAT in Nigeria’, he noted: “As members of APC, it is important that the governors are 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.’
“Both in terms of ‘getting Nigeria’s public finances in order’ and ‘investment in infrastructure’, APC led federal government is implementing provisions of the APC manifesto to the letter. Nigerian’s especially PDP leaders can conveniently dismiss all the work being done to develop Nigeria’s dilapidated and abandoned infrastructure, but the question of ‘expanding our tax base to increase non-oil revenue’ cannot be disputed.
“One strong evidence of that is the debate about states collecting VAT. It is very easy to play very cheap politics with these issues, partially because also, as a party, APC is not taking ownership of its achievements. Instead, its achievements are now being interpreted to justify some rebellious politics against the APC led federal government,” he said.
Reacting further, he said: “So far, the VAT debate is more about perceived injustice on account of Nigeria’s divisive politics of ethnicity. Substantive issues of desirability or otherwise of VAT, including all the administrative challenges bordering on implications of methods of collection and why it is a crucially determining factor for any democracy is ignored.
“Part of the challenge of debating policy issues in Nigeria is that public noise, largely influenced by subjective anger of citizens become the guiding consideration. The subjective anger of citizens is mainly about the blind politics of dismissing whatever is associated with federal government as biasedly in favour of a section of the country, however it is defined.
“With or without justification, many Nigerians who dominate the media space accuse the federal government of injustice. In several respects, ethnicised campaigns is further entrenching divisive politics, thereby increasing social and political inequality. As things are, Nigerian politics is blind to ‘egalitarian commitments’ of promoting national integration,” he argued.
On the states that will be the worst hit, he said: “Nigerian democracy and politics must functionally rise above sentiment. Instead of debating how to consume the little resources so far available, Nigerian political leaders should be debating how to increase available resources.
“Even within the limit of the debate about increased available resources, the question of what governments need to do, policy measures required, including issues of tax, its administration and orientation in terms of whether it should favour the low or high-income groups should not be issues that would be blindly considered.
“In the same way Rivers and Lagos imagined that they would have more revenue if they were allowed to collect VAT and therefore control everything, they collected without sharing with the federal government and other states, states like Osun, Ekiti, Bayelsa, Ebonyi, Abia, would lose. On the other hand, Oyo, Ogun, Kano, Kaduna and Enugu, may be the surprise actual gainers,” the statement read.
Defending the increase in collection responsible for the agitations, Lukman said: “That Nigerians are debating whether it is states or federal government that should collect VAT signify some progress, which has to do with the fact that there is an increase in what is being generated from VAT. For instance, in 2015, the total amount collected was N759.43 billion. Between 2016 to 2020, there was consistently increase in the amount collected respectively to N777.51 billion, N972.35 billion, N1.11 trillion, N1.17 trillion and N1.531 trillion.
“Everything considered, under the APC-led federal government of President Buhari, VAT collection increased from N759.43 billion in 2015 to N1.531 trillion in 2020, an increase of more than hundred percent.
“With respect to the specific issue of VAT, if the federal government can record increase of more than hundred percent between 2015 and 2020, is the current figure representative of the total expected collection from VAT? Simple reading of all the federal government revenue projections as contained in every year’s budget estimate will indicate a wide gap in expectation.
“Although there is remarkable increase in collection, it should be recognised that a lot more can be done to generate more revenue from VAT. Can transferring collection to state governments achieve that? May be and maybe not. But beyond the question of what is collected and what states get, what is even the economic implications VAT?” Lukman noted in the statement.