Nyesom Wike
Nyesom Wike

Rivers Primed for Tussle with Abuja over VAT

NEWS DIGEST – Governor Nyesom Wike warns that the state may have to react unfavourably if the Federal Inland Revenue Service, FIRS, continues to challenge its VAT collection authority within the state.

“You don’t bully a state like us,” Gov. Wike said of any attempt by the FIRS to muzzle the judiciary into changing the verdict. “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 all their offices in the state.”

Rivers first drew the line with the Federal Government last month after a court ruling by a Federal High Court in Port-Harcourt entrenched the powers to collect value-added tax and personal income tax, on the state government.

Governor Wike, on Wednesday, explained his motivation to immediately sign the VAT bill to law upon the ruling by the court.

He said: “In the month of June 2021, which we shared in July, VAT collected in Rivers state was N15.1billion. What they gave us was N4.7billion. See the gross injustice, and the money includes contracts awarded by the Rivers state government.

“This is not an issue of party, it is the issue of infraction of the constitution, issues of legality. Look at Lagos, it is not the same party with me. In the month of June 2021, the VAT collected in Lagos was N46.4billion but see what Lagos got—N9.3billion.

“Have you seen the injustice in the country? VAT collected in Kano was N2.8billion and they gave them N2.8billion. Is there justice in this country?”

Although officials of the FIRS say that administration of VAT by state governments will cause businesses to pay multiple VAT and drive up cost, Governor Wike is convinced that the disparity in resource allocation by Abuja is reason enough for each state to collect and manage their VAT.

“Rivers state is challenging the FIRS from collecting VAT in Rivers state. I am not challenging the FIRS from collecting VAT in Abuja,” Gov. Wike said.

In the past week, sundry states, prominently Lagos and Ekiti, have begun legislation to enact the VAT law and begin the collection of VAT. Akwa-Ibom and Adamawa have also voiced support and intent to join.

Federal officials say that they could lose a projected 2.44 trillion VAT revenue to state government in 2022 if they fail with their appeal.

In a show of strength, Governor Wike has called on business owners and companies in the states to pay their VAT to the state or risk having their companies sealed off.

“If I say I will, know that I will,” he said.