MIXED REACTIONS resonated, among the audience, at a stakeholders meeting with Governor Nyesom Wike, of Rivers State, in Port Harcourt, on Wednesday, when he revealed that in June 2021, N15 billion VAT revenue was generated from the State, and the state government got N4.7 billion from the central federal government as its share of VAT; while Kano State generated N2.8 billion VAT revenue, and got same N2.8 billion back from the federal government.
In the same month of June, Lagos State government generated N46.4 billion from VAT proceeds, and the federal government allocated N9.3billion to Lagos State government. In astonishment, Wike exclaimed: “Sometimes, you don’t want to believe these things exist”.
Governor Wike was interacting with business interests, stakeholders and oil companies, resident in the State, in Port Harcourt, the state capital, when he threw the bombshell. He called it “injustice in the country”, on the areas of resource allocation.
A Federal High Court in Port Harcourt, in August, delivered judgement in suit FHC/PH/CS/149/2020, by River State government, against the federal government; that Rivers State government, and not the Federal Government, is constitutionally, powered to collect VAT within its territory.
Wike also, revealed, that the Federal Inland Revenue Service, FIRS, the agency of government for the collection of VAT, had secretly, written to the National Assembly to include VAT COLLECTION in the Exclusive Legislative list, in the constitutional amendment, to empower the federal government to continue to collect VAT from State, while the suit in the Federal High was on.
AT THE STAKEHOLDERS meeting, Governor directed companies based in the state, to begin remitting Value Added Tax, VAT, to the state government from September 2021. Failure to comply, he would act on the provisions in the recently signed Tax Law in the State, by sealing-off the premises of defaulting companies.
“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. The Federal Government surreptitiously lobbied to amend the constitution to place VAT collection in the exclusive legislative list.
“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 takeover all their offices in the state”, Wike warned.
He further warned oil companies and business entities in state not to remit VAT to the Federal Inland Revenue Service, FIRS; but to River State Government. “I don’t want you to fall prey to the people who think they can use force to take our money. If you want to take advantage and say you don’t know who to pay to, it is a lie, you know.
“From this September, we must collect all our VAT. All the banks playing pranks by saying they have not heard from their head offices. I will seal off your branches. If I say I will, know that I will. We will not look back but seal off the premises of such companies”.
ON ENFORCEMENT of the State government tax law, Wike said Rivers did not need the Nigeria Police Force to enforce the collection of VAT. The state government will use the “state own created security outfit” backed by law, to enforce the collection of VAT in the State.
As a firmed resolve by Rivers State government to, henceforth, collect VAT, Wike said: “I will be happy at my time that heaven came down, because I will create a record that it was my time that heaven came down”.
And added: “We don’t have to use the police; we have our security outfit as allowed by law and we will use it. Please tell your authorities to pay our VAT to our revenue board, which of course you have been told how to do it.
“Until there is a court order stopping us, we won’t stop the collection. If an appeal court revokes it, no problem, but the position of the law today is that VAT is for Rivers State. The FIRS cannot threaten you. We are the landlords here. I hope you know that. We have enormous powers to use by law”, Wike further warned.