₦airaland Forum

“We share the sentiment expressed by the Northern Governors regarding the inequity inherent in the current model of derivation as a basis for distributing VAT revenue. This issue, in fact, affects many states across all geopolitical zones because the current derivation is mainly determined based on where VAT is remitted, rather than where goods or services are supplied or consumed.

Similarly, some states have argued that Lagos State, which hosts most corporate headquarters gets to claim source of all VAT paid by customers.

The northern governors raised this in the Monday’s communique.
“This is because companies remit VAT using the location of their headquarters and tax office and not where the services and goods are consumed. In view of the foregoing, the Forum unanimously rejects the proposed Tax Amendments and calls on members of the National Assembly to oppose any that can jeopardise the well-being of our people,” the communique of the northern governors forum reads, in part.

Ikaeniyan0:
The concern of the Northern governors is valid, but if they went through the bill before complaining, they would have seen the bill will right the wrong.

I doubt the Northern governors even took a look at the bill before rejecting it. We can't continue like this in Nigeria

CodeTemplarr:
More



Is value addition about consumption or about adding value? Production is the value adding process from what i understand. What should be considered is industrial and value adding activity on the final goods.

They want to be taking tax while another state that spends extra income to maintain security and business friendly environment dont get rewarded for their effort. The reason we dont move forward in this country. It is about grabbing from the weaker and smaller region.

seunowa:
Hmmm... I wholly agree with you on the submission that production is the value adding process. But how best can the federal government address the fear of the northern governors?

CodeTemplarr:
I disagree. Consumption is not a form of value addition. The value added to raw inputs are services rendered to the final consumer.
By asking that where goods are consumed be used to guage VAT accruing to states, they have committed a grave error because they reject consumption of alcojol and pork.
They are also not considering the exta efforts of the states where the goods are produced. Efforts like security and good business environment which cost money to maintain. A Lagos state that employs extra hands for security and orderliness(LASTMA and KAI) should be compensated for that effort. The only fair way to compensate such states is by giving more back to them for being the host to more industries and businesses. Imagine a Warri and Delta state that has chased out so many top oil companies fighting with another friendlier state putting in extra efforts to keep actiivities of oil companies going. At some point the friendlier state to oil companies may lost them entirely and that will likely inbolve that investor leaving Nigeria.

Ikaeniyan0:
It's going to be a win win situation for everybody if this new bill is passed

Dreal1247:
The North are always united when placing demand on the matters affecting them. They always unite against the South. But the South are always divided with individualistic mentality.

seunowa:
Hmmm... I wholly agree with you on the submission that production is the value adding process. But how best can the federal government address the fear of the northern governors?

CodeTemplarr:
There is no fear anywhere. It is rather greed.
They use their billions to do hajj and build mosques but want the fruita of another states that maintain LASTMA and KAI. That's greed and not fear.

CodeTemplarr:
yes, but anything that thtreatens the robbery sructure that favours the north is frowned at by them. They will ratherthings go back to normal(higher crude prices and debt cancellation) so they can eat fromm the other side more. Thats why they cant risk a tax reform that cannunsettle that culturr of indolence killing production.

Esthered:
They should make their states business friendly thereby attracting investors.

Ikaeniyan0:
If this bill goes through, productive states like Lagos state will get more, what unproductive states like Katsina will get will fall, while what states like Anambra get will increase.

Newsmills:
Suffer suffer for world enjoy for heaven.North has taxable items but since they are used to FAAC their mentality is rigid nothing more or less unity for unmerited gains,every song sang by north is indivisible nigeria simply because of allocations from Abuja.

aariwa:
T- pain wants to create another alpha beta