The governor of Rivers State, Mr. Nyesom Wike, has said that there is no equity in the sharing of value added tax (VAT) revenue as it is skewed towards the states that generate more.
The governor stated this at a meeting in Port Harcourt with corporate bodies and other stakeholders affected by the recent VAT Law enacted by the state.
The meeting held yesterday was meant to inform the stakeholders of the commencement of the implementation of the VAT law.
Wike disclosed that the state was generating an average of N15 billion as VAT monthly through the Federal Inland Revenue Service (FIRS) but the federal government allocated a paltry 25 per cent of the amount to the state.
He further revealed that Rivers generated N15 billion VAT revenue in June this year but got N4.7 billion in as its share while Kano generated N2.8 billion in the same month and got the same N2.8 billion back.
The governor said the disparity in VAT proceeds and what is given to the states is an inexplicable form of injustice that weakens the performance potential of the states.
“Let me tell you the injustice in this country. In the month of June 2021, which we shared in July, VAT collected in Rivers State was N15.1 billion. What they gave us was N4.7 billion. See the gross injustice and this money includes contracts awarded by the Rivers State Government.
“This is not an issue of party; it is the issues of infraction of the constitution, issues of illegality. Look at Lagos; it is not the same party as me. In the month of June 2021, the VAT collected in Lagos was N46.4 billion but see what Lagos got, N9.3 billion! Have you seen the injustice in the country? VAT collected in Kano was N2. 8 billion and they gave them N2.8 billion. Is there any justice in this country?”
He described as “morally offensive” a situation where the Rivers State government would award contracts for state roads worth N200 billion and the FIRS would illegally receive 7.5 per cent of the amount as VAT to be distributed among the states.
“So you allow me to call the big companies, award contracts to them, then you, FIRS, come and collect the tax and then go and distribute it to other states that are not awarding contracts. How does it sound?
“Sometimes, you don’t want to believe these things exist. “Rivers State is challenging the FIRS from collecting VAT in Rivers State.
“I am not challenging the FIRS from collecting VAT in Abuja. Let it be understood. The law says Rivers must collect VAT in the state.
“We have challenged it and we have no apologies to anybody. I don’t want to be in the good books of anybody, but in the good books of God.
“You don’t bully a state like us. The FIRS should be very careful. I have the political will to do a lot of things. If they continue to bully us, I will take (over) all their offices in the state,” he added.
He therefore directedconstruction firms, manufacturers and business owners as well as other firms in the state to begin the remittance of their VAT for the month of September 2021 and subsequent months to the Rivers State Internal Revenue Service.
He said he had already assented to the state’s VAT law passed by the state house of assembly.
