Collecting VAT: Nigeria’s tax system is problematic and confusing, says Fayemi

Kayode Fayemi, Governor of Ekiti State, said the Nigerian Governors’ Forum (NGF) is awaiting the Supreme Court ruling on the collection of value added tax (VAT).

Fayemi, who is also the chairman of the NGF, said Nigeria’s tax system is problematic and confusing and needs special attention.

Recently, the Southern Governors Forum supported the collection of VAT by state governments instead of the Federal Inland Revenue Service (FIRS) on behalf of the federation.

Two states – Rivers and Lagos states – had passed laws for collecting VAT, but the appeals court ordered that states should maintain the status quo pending the decision of an appeal filed by FIRS.

Rivers State had also asked The Supreme Court set aside an order of the court of appeal.

Fayemi, in a live interview on Arise Television, monitored by TheCable, said on Sunday that governors were awaiting the outcome of the case instituted by some state governors.

He said the Governors’ Forum is currently reviewing the issues and consulting on the implications of the collection on state governments.

“For us at NGF, this is an issue that we are looking at both legally and politically. We ask our experts to help us consider the implications for states, ”said Fayemi.

“Our point of view is that the Supreme Court should speed up the decision on this so that we are clear on who should be in charge of VAT – whether it is FIRS or the States.

“We will wait for the Supreme Court to rule on this matter.

“The bottom line is that our tax system is problematic, confusing and contradictory, and we need to do a lot more to start clarifying things. So that we can have more efficient ways of collecting taxes.

Asked about President Muhammadu Buhari’s calls for debt cancellation at the United Nations general assembly, Fayemi said federal government borrowing is for specific reasons and is lending.

“Nigeria borrows for specific reasons. Most of what we borrow is specific. If you look at what we’re borrowing. You will see that these are specific and most attractive loans, ”he said.

Fayemi said the borrowing meets World Bank and IMF standards.

“On the other hand, you have the Chinese infrastructure loans,” he added.

“We can now ask ourselves if we should use 97% of the debt service. It is a debate that we can have.

“The problem is, why are you borrowing. Do you borrow for consumption or for infrastructure development?

“Buhari is to be commended for this.

“The point is, we have income issues… borrowing is a win-win situation for our country and our economy.

“I don’t think there is anything wrong if the president calls for a review of the debt structuring.”


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