If the recent judgement of a Federal High Court sitting in Port Harcourt, Rivers State, which held that
the Rivers State Government and not the Federal Inland Revenue Services (FIRS) was the rightful authority to collect Value-Added Tax (VAT) and Personal Income Tax (PIT) in the state is anything to go by, states will soon take charge of the money-spinning VAT and PIT in Nigeria.
That was the judgement of Justice Stephen Pam in a suit filed by the Rivers State Government challenging the right of the Federal Government to demand VAT and PIT. The state had asked the court to declare that the constitutional power of the Federal Government to impose taxes and duties was limited to items listed in items 58 and 59 of Part 1 of the Second Schedule of the 1999 Constitution (as amended).
Likewise, the state government had urged the court to declare that by the provisions of items 7 and 8 of Part II (Concurrent Legislative List) of the Second Schedule of the Constitution, the power of the Federal Government to delegate the collection of taxes can only be exercised by the state government or other authority of the state and no other person.
Also, the court was asked to declare that all statutory provisions made or purportedly made in the exercise of the legislative powers of the Federal Government, containing provisions inconsistent with the powers to impose tax and duties, as prescribed by items 58 and 59 of Part I of the Second Schedule of the 1999 Constitution, or inconsistent with the power to delegate the duty of collection of taxes, as contained in items 7 and 8 of Part II of the Second Schedule of the Constitution, are unconstitutional, null and void.
The court agreed with the state government that it was the state and not FIRS that is constitutionally entitled to impose taxes enforceable or collectable in its territory like consumption or sales tax, VAT, education and other taxes or levies, other than the taxes and duties specifically reserved for the Federal Government by items 58 and 59 of Part 1 of the Second Schedule of the 1999 Constitution as amended.
The implication of the ruling is that it is now illegal for taxes like VAT and PIT to be levied by any Federal Government agency in Rivers State. In other words, the issue of VAT in the territory of Rivers State and PIT should be reserved for the government of Rivers State. This is a welcome judgement. It was least imagined that a state could successfully contest the legality of VAT collection by the federal authorities in court.
In 2014, the Lagos State Government lost a case filed at the Supreme Court challenging the powers of the Federal Government to collect VAT on goods and services supplied in the state. The state had sued the Federal Government seeking a ruling to repeal the VAT Act on the basis that it was outside the legislative remit of the federal authorities to collect the tax.
The court, however, ruled in favour of the preliminary objection of the Attorney General of the Federation on behalf of the Federal Government that the Supreme Court lacked original jurisdiction in the matter as it was a dispute between a federal agency and Lagos State, not between the Federal and the Lagos State Governments. This was on the basis that VAT was collected by the FIRS which is a federal agency.
As the court rightly held, there is no law that authorises the Federal Government to demand or collect VAT or PIT in the country. That indicates a lot of illegality being perpetrated by the federal authorities. This should be resisted, in particular by state governors who are often victims of their arbitrariness. Governor Nyesom Wike’s action to seek interpretation of the law in this regard is commendable. These are the things that should have to be tested in the courts to allow Nigerians to know their legal status.
After many years of illegally collecting these taxes, it is comforting to know that states, not the Federal Government, are the legitimate authority to require them. The ruling will certainly address the injustice, anomalies and disparities in the generation and distribution of VAT funds across the 36 states and the Federal Capital Territory (FCT). VAT focuses on goods and services consumed by residents in a state like alcohol.
Most Northern states generate nothing in the sphere of alcohol VAT following existing Sharia laws, which prohibit the consumption of the product in the respective states. Logically, one would think and expect that the affected Northern states would be excluded from the receipts on alcohol VAT since they generate zero revenue from the sale and consumption of liquor and beers.
But that is not the case. By the irrational suppositions and thoughts of the Federal Government, the Northern states participate in the sharing or distribution of VAT on alcohol. We find this offensive, unreasonable, iniquitous and unjust. Why would the Northern states benefit from the alcohol VAT with zero generation? To begin with, the court’s decision will eliminate the disparities in the country’s VAT administration.
There is a need to understand whether Nigeria is a federal or unitary state. Although the nation operates a federal constitution, in practice it functions as a unitary state, a consequence of the centralist tendencies that have come to characterise the system of government. The way federalism works in this country is not consistent with the basic tenets of the system. However, the judgment of the court shows that we are a federation, not a unitary state; so, the country should be governed as such.
If the court’s decision is upheld by the Supreme Court, it means that more money will accrue to Rivers State. That will equally mean more projects and a better life for people in the state. Consequently, the state government will need to be more accountable. Governor Wike must not let go of his advocacy in favour of the good governance of the country. That depicts him as the conscience of the nation.
WDP: Underscoring Importance Of Harmony
On September 21 each year, the International Day of Peace is celebrated globally. Also known as the
World Day of Peace, the occasion aims to crystallize peace among nations by regularly observing non-violence and ceasefire. It is a time devoted to facilitating international support for building a rhythmic and viable world. Besides living in peace, the day is intended to motivate individuals and nations to recognise the full puissance of global unity.
The 2021 theme for the International Day of Peace is “Recovering Better for an Equitable and Sustainable World”. The objective is to help everyone to recover better, transform the world into a place that is more proportional, healthier, sustainable and just.
Lately, there has been a reanimation of prejudice, hostility and stigma all over the world that has taken more lives rather than preserve them. As the world recovers from the Covid-19 pandemic, the day presents the occasion to reflect on how to encourage everyone to recoup better, bolster resilience, and revolutionise the world into one that is more equal, just, equitable, inclusive, sustainable, and stronger.
The pandemic is especially affecting underprivileged and marginalised groups. It was reported that by April 2021, over 687million doses of Covid-19 vaccine had been administered worldwide, but over 100 countries had not received a single dose. Those caught up in conflicts are particularly unlikely to have access to health care.
Moreover, while reinforcing harmony among countries, we must make peace with nature. This is because climate modification is not on recess and the demand for the moment is to evolve a green and sustainable global economy that provides jobs, reduces greenhouse gas emissions, and inculcates resilience to the ever-increasing climate impacts.
In line with the UN Secretary-General’s demand for a global ceasefire, in February 2021, the Security Council reached a resolution calling for member-states to uphold a “sustained humanitarian pause” to local conflicts. It is crucial to abide by the call for the global ceasefire to ensure that those caught in conflict have access to life-saving vaccines and medicines.
In 1981, the United Nations General Assembly (UNGA) designated the third Tuesday in September as World Day of Peace. This was the first day of the regular session of the General Assembly. Subsequently, in 2001, September 21 was proclaimed the International Day of Peace. This is a day to lull, reflect and consider the best way to break the vicious circle of violence that conflict produces.
As the world commemorated last Tuesday, the giant of Africa, sadly, continues to wade through a series of crises that have diminished the level of peace in the country. According to the 2018 Global Peace Index (GPI), the nation ranks 148th out of 163 countries in the global ranking for peace. The GPI, which is the world’s leading measure of global peacefulness, assesses the state of peace using three thematic domains: the level of societal safety and security; the extent of ongoing domestic and global conflict; and the extent of militarisation.
Besides Cape Verde, Nigeria is the least peaceful nation in West Africa. In the 44 countries in sub-Saharan Africa identified in the report, Nigeria ranks 40th. This makes it one of the five least peaceful nations on the continent. Also, the Boko Haram insurrection, which began in 2009, has led to massive displacements of people in the North-East of the country.
Aside from the Boko Haram/ISWAP insurgency, intense disputes between farmers and herders have killed many Nigerians and displaced a record number of persons, especially in the North-Central. According to the Global Terrorism Index (GTI), Fulani herdsmen undertook more assaults and were answerable for more deaths than Boko Haram in 2016. Both lethal groups are the most considerable security threats Nigeria has faced over the years.
Political, ethnic, and religious divide renders Nigeria’s institutions ineffectual in handling crises such as violence, poverty, family disintegration, and widespread corruption. We need to cultivate optimism as a people with a common objective of tranquility. Time has come for the government and Nigerians to work together to find lasting solutions to these issues to build a stronger nation for posterity.
Nigerians should ignore divisive comments and embrace peace for the good of the country. We must make sacrifices as the nation recovers from the challenges that stand in the way of stability. No nation can flourish and realise its full potential in the midst of conflict; therefore, Nigeria needs to be put first for progress and advancement. This is the moment to unite to build effective and inclusive institutions.
This year’s International Peace Day is a keepsake to the Nigerian government at all levels to intensify efforts in combating insecurity and create enabling environments through good governance for socio-economic growth and expansion, economic opportunities and poverty alleviation. This will positively ensure an enduring cordiality and peaceful cohabitation among all tribes and persons in the country.
Here in Rivers State, the significance of peace cannot be overemphasised, as according to the Deputy Governor, Dr Ipalibo Harry Banigo, “Progress and development cannot thrive in an atmosphere of bitterness and rancour. It, therefore, behoves on all residents to keep the peace at all times to fast track the development agenda of the Governor Nyesom Wike-led administration.” In her Goodwill Message to mark the day, Banigo reiterated the need for all residents in the state to live peacefully with their neighbours in order to attract more development projects to all nooks and crannies of the state.
We note that since the inception of the Wike-led government in 2015, issues of communal clashes triggered by land boundary disputes have drastically reduced, and the State Boundary Commission has adjudicated on a number of volatile land boundary disagreements, which have engendered peace in communities. Besides, the government has partnered with community leaders, including traditional rulers, women and youth leaders, and community development committees (CDCs) to drive peace and harmony in communities as a cardinal ingredient of governance.
For us, the present administration has done so much to promote peace and unity. It is, therefore, essential that all residents of the state join hands with the government to sustain the peace so that recovery from the pandemic can be faster, and the resilience to build a better, stronger state in line with the NEW Rivers Vision achieved.
As Nigeria Marks World Literacy Day!
On September 8, Nigeria joined the rest of the world to commemorate the International Literacy Day. The day, which is celebrated to remind the public of the importance of literacy as a matter of dignity and human rights, and to advance the literacy agenda towards a more literate and sustainable society was first celebrated in 1967.
Observed by all United Nations (UN) member states, it was declared by the United Nations Education, Scientific and Cultural Organisation (UNESCO) on October 26, 1966 at the 14th Session of UNESCO’s General Conference.
According to the world body, the theme for the celebration this year is “Literacy for a human-centred recovery: Narrowing the digital divide”, in keeping with the unparalleled level of disruption caused by the Covid-19 pandemic to teaching and learning.
UNESCO notes that about 773 million people in need of access to literacy learning opportunities were adversely affected as many initial response plans to the pandemic did not include them with schools’ closure disrupting the education of 62.3 per cent of the world’s student population of 1.09 billion while “The rapid shift to distance learning also highlighted the persistent digital divide in terms of connectivity, infrastructure, and the ability to engage with technology, as well as disparities in other services such as access to electricity, which has limited learning options.
“The pandemic, however, was a reminder of the critical importance of literacy. Beyond its intrinsic importance as part of the right to education, literacy empowers individuals and improves their lives by expanding their capabilities to choose a kind of life they can value. It is also a driver of sustainable development. Literacy is an integral part of education and lifelong learning premised on humanism as defined by the Sustainable Development Goal 4. Literacy, therefore, is central to a human-centred recovery from the Covid-19 crisis.”
The 2021 celebration also aims at exploring “what makes technology-enabled literacy learning inclusive and meaningful to leave no one behind,” while providing the opportunity to reconceptualise future literacy and learning, within and beyond the context of the pandemic.
Clearly, Sustainable Development Goal 4 has as one of its targets ensuring all young people achieve literacy and numeracy and that adults, who lack these skills are given the opportunity to acquire them, just as the UN’s Sustainable Development Agenda, adopted by world leaders in September 20‘5, promotes universal access to quality education and learning.
Available data indicates that Nigeria which had a literacy rate of 70.20% in 2006 declined to 62.02% in 2018 while other African countries like Gabon had 90%, Zambia 86.75%, Kenya 81.54%, Congo Republic 82%, Ghana 79.04%, Cameroon 85.07% and Morocco 73.75% respectively. This is as other countries in the world like Cuba, Georgia, Estonia, Cyprus, Croatia, Balarus and China, amongst others had 100% literacy rate.
There is no indication that the percentage of the population age 15 and above who can read and write, with understanding, has since improved owing to the prevailing myriad of challenges experienced in the country, including the advent of the Covid-19 pandemic.
The Tide thinks that the 2021 International Literacy Day celebration should be an occasion for sober-reflection, stock taking and a time for harnessing necessary resources and energies towards strengthening the educational system in the country by the Federal Government, sub-national administrations and well-meaning corporate bodies and individuals.
The fact cannot be overstated that the high rate of illiteracy partly accounts for the low level of socioeconomic development of Nigeria as the growth of any nation depends on the quantity and quality of its individual citizens.
While we acknowledge that government at various levels have not been negligent on the issue of improving the literacy level in the country, the fact remains that there are yawning gaps to bridge if our nation will not remain imperiled by the obvious consequences of our huge illiterate population that unscrupulous elements have taken advantage of to put our fatherland in mortal danger.
There is no doubt that funding for the educational sector in the country needs to significantly improve. Admittedly, government cannot do it alone, but it must provide the greatest motivation and drive. An adequately funded free and compulsory educational policy is the way to go because an investment in both formal basic education, youth and adult literacy and non-formal education that ensures that children, youth and adult have access to adequate educational opportunities will help them develop their literacy skills and make Nigeria a safer and more prosperous nation.
There is no greater evil that has been unleashed upon our country than the armed attacks on our educational institutions and the seemingly intractable wholesale kidnap of school children from educational sanctuaries.
Nothing will be more befitting to present to Nigerians than the assurance of a safe, secure and conducive teaching and learning environment on this auspicious occasion. It is the only way to demonstrate the existence of a government that is working for an assured brighter future for our country and justify Nigeria’s celebration of the World Literacy Day.
Why Mismanage Public Funds?
A Nigerian politician once confessed that the corrupt practices which political office-holders are being accused of were taught them by civil servants. From the inflation of contracts, rents and other financial transactions, to the padding of national budgets, political office-holders usually depend on experienced civil servants for advice and guidance. Accounts sections of various ministries, departments and agencies are usually the starting points of official malfeasance.
Page 3 of The Tide newspaper of Friday, July 23, 2021, had this news headline: ‘Senate Queries Loss of N54Bn On External Loans’. The Senate called for the sanctioning of officials in the office of the Accountant-General of the Federation, who made Nigeria lose $274.2 million (N54.1 billion) on external loans. Obviously the Senate would not have issued such query without substantial evidence of malfeasance, after some detailed fact-finding interim investigations.
The Upper Chamber cannot be faulted for approving the report of the Senate Committee on Public Accounts, which did the interim fact-finding investigation on the matter. Therefore, it follows that asking the AGF, Ahmed Idris, to identify and sanction officers responsible for mismanaging public funds, is right and proper. There was a mention of Rule 3115 of the Financial Regulations which deals with gross misconducts. Surely, the public service system is governed by Financial Regulations which must apply where needful.
Text of Rule 3115 of the Financial Regulations reads: “An accounting officer who is queried for his failure to manage or spend public funds effectively or who spends money without due regard to economy, contrary to Financial Regulation 415 and fails to reply to the query, shall be removed from the schedule and be disciplined in accordance with the Public Service Rules”.
It was observed that there was a total exchange loss difference of $278.2 million (N54.1 billion) reported by the office of the AGF, with documents provided. But such vital documents could not be found in the Debt Management Office. With the proverbial buck ending in the Office of the Accountant-General of the Federation, the jinxed task is to “provide the sources of the exchange loss difference of $274.2 million (N54.1 billion) with documentary evidence”.
What will embitter the Nigerian public more is the continuing borrowing, thus piling up of huge debt burden on the nation and its people. Also annoying to the articulate class of Nigerians is the impression spreading abroad with regards to integrity deficit in the country. It would be shameful and untrue to say that there are no people of outstanding integrity and sterling qualities in Nigeria. Rather, it is our fault that honest and serious efforts are not made to locate such Nigerians and use them to clear the mess that we find ourselves in. One theory standing out in this regard is that those who ruined the economy and reputation of this country would be bitter and fear being put to shame by any group that would turn things around.
The experiences of 1966 give glaring evidence that there are obvious and powerful forces of retrogression holding this nation to ransom, and ready to do anything to hold the country down. Fair can be foul and foul fair in their perception of justice and equity. Late Osama bin Ladin made allusion to “Anhaki, the wizard from the desert” who, like a soulless zombie, can hardly be rooted out, even when dead. Perhaps, that is why bandits can hardly be rooted out, even with A-29 Super Tucano aircraft arriving Nigeria.
According to The Tide editorial comment of same Friday, July 23, 2021, “The Latest DMO statistics, covering the first quarter of 2021, indicated that the debt portfolio had increased again to N33.10 trillion”. This is in addition to “another N10 trillion in overdraft with the Central Bank of Nigeria (CBN)”. Very pertinent is The Tide newspaper’s comment: “We wonder what the managers of the economy have up their sleeves when they take on these liabilities which have serious implications not only for the present, but also for the future generations of Nigerians”.
Let it not be said that “when Rome was burning” no patriotic citizens raised alarm. What we find is the engagement of fiddlers to provide soothing sound of music and spin-doctors to do damage-control consultancy services. There had been the hiring of marabouts from Sudan and Saudi Arabia, to exorcise bandits and Boko Haram insurgents from Nigerian soil. Apart from fraudulent padding of accounts and contract values, do we not have cases of lavish spending in the midst of hunger?
A major disservice which any nation can do to itself and to posterity is leave a legacy that would drain the economy in years to come. While political leaders live in obscene opulence in the midst of widespread poverty and hunger, it is inexcusable that managers of the affairs of the nation should be asking for more foreign loans. It is saddening why managers of the nation’s affairs cannot see the need to make some patriotic sacrifices by cutting down their comfort and perks.
How do we explain a situation where public servants, particularly those in accounts units and security agencies, own several houses in Nigeria and foreign countries? Should we blame those who help themselves from public funds (where they find loopholes to do so) when those who should lead the masses by good examples, merely pontificate and prevaricate? Nigerians have come to know the hypocrisies, shenanigans and unreliable nature of the leadership class. It is quite sad to see the zeal with which security operatives pounce upon those who have the courage to point out official malfeasance.
Public funds will continue to be mismanaged, pinched, spent lavishly and unmercifully until the nation’s political economy is restructured. The structuralist philosophy stipulates that a Just and Firm structure would hardly admit or accommodate fraudulent manipulators of monetary affairs. Late Chief Obafemi Awolowo was a high priest of that philosophical school. During the Nigerian Civil War he managed the nation’s funds without going aborrowing, neither did he spare accounts fixers! Good name; good legacy!
By: Bright Amirize
Dr Amirize is a retired lecturer from the Rivers State University, Port Harcourt.
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