VAT COLLECTION SHOULD BE PLACED UNDER CONCURRENT LIST – DR KENNEDY IWUNDU OPINED

Recently, the Federal High Court in Port Harcourt ruled that Rivers State government should be responsible for VAT collection and not the Federal Inland Revenue Services (FIRS).

Dr. Kennedy Iwundu – a tax expert says that the constitution of Nigeria never stipulated who to collect VAT because transaction taxes such as VAT and WHT were never mentioned in exclusive and concurrent lists. He said that the drafters of the constitution never anticipated the evolution of transaction taxes. When the constitution was drafted, transaction taxes (VAT & WHT) were not familiar to Nigeria.

He suggested that VAT should be on the concurrent list where both the federal and the state governments will be involved in collection.

His proposal is that the federal government should collect VAT from:

i. Cross border transactions (imports/exports of goods and services). ii. Multinational companies
iii. Non resident companies
iv. Hi tech companies (facebook, google etc)
v. Federal government contracts.
He further suggested that states should be allowed to collect VAT from the following areas such as:-
i. Local companies (within their territories)
ii. Enterprises and individuals (within their territories)
iii. State government contracts.
He also suggested that states who suffer environmental degradation of local industries should be the ones to enjoy VAT collected from those local industries.

Dr Kennedy emphasized that the need to strengthen our fiscal federalism is now where states should be able to pay salaries of their workers without depending on federal allocation.
He further urged the FIRS to use the Joint Tax Board (JTB) as a platform to help states increase internal revenue collection capacity especially in the areas of personal income tax and stamp duties.


Dr Kennedy Iwundu urged stakeholders to be patriotic in helping Nigerian economy grow and stop playing politics when it comes to revenue collection and allocation.

My northern friends will kick against this since it will not favour them