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That Rivers’ Landmark Victory On VAT

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Whether the recent ruling of the Federal High Court which stated that the state governments should collect Value Added Tax (VAT) and Personal Income Tax (PIT) will lead to a legal tussle between the states and the federal government is almost a given. Already, the Federal Inland Revenue Services (FIRS), speaking through its Director, Communications and Liaison Department, Dr Abdullahi Ismaila Ahmed, had made it clear that they would appeal the court’s decision and the Office of the Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN), may also do the same sooner or later.
Of course, it is the right of any individual or group to challenge whatever court ruling they do not agree with up to the highest court in the land, the Supreme Court, just as it was the right of the Rivers State Government to seek the interpretation of the section of the constitution that wasn’t clear to them pertaining the collection of taxes.
During an interview on national television on Tuesday, Governor Nyesom Wike, stated unequivocally that the state needed a judicial pronouncement on the issue of VAT and PIT collection that had been a controversial issue for decades. He said, “We felt, as a state, that look, states have been encapsulated. States have been enslaved. States have been turned into beggars. Every state that is broke runs to the federal government when, in the real sense, you have areas where you should raise revenue to take care of your state. Such areas have to do with collection of taxes; part of it is the VAT.
“And there has been the contention that VAT should be or is within the purview of the Federal Government and we said, let us go to court and ask for the interpretation of who actually is responsible for the collection of these taxes. And it is not just for the interest of Rivers State. It is for the interest of the entire states”.
Not a few persons have asked where Nigeria got her own version of federalism which gives so much power to the federal government while the other two components – states and the local governments — must depend on the centre for their existence and sustenance, almost turning the country to a unitary state. Some analysts argued that though it is the constitutional responsibility of the states to collect VAT and PIT; VAT law was introduced in 1993 because only the federal government had the capacity to collect them. What that “lack of capacity” means even when states like Rivers have structures and qualified personnel who have competently been handling revenue and tax-related matters for ages, remains vague.
The truth is that there is no way our federalism can be strengthened if the three tiers of government are not allowed to carry out their responsibilities as empowered by the constitution. Not too long ago, Edo State Governor, Godwin Obaseki, raised alarm over the practice of states converging in Abuja at the end of every month to share revenue allocation, saying that such convention is no longer tenable and it will continue to hinder development in the states and country at large.
Our federation is such that monthly revenue accruing from oil, corporate taxes, VAT, customs, and other levies are shared across the three tiers of government- federal, states and the local governments after 13% of any revenue made from natural resources is paid to the origin states of those resources and other deduction associated with collecting revenues is made. In line with the sharing formula, the federal government takes 52.68%, the states share 26.72% while the local governments get 20.60%. Each state gets its own share of the revenue based on a “Horizontal Allocation Formula” with a few factors put into consideration.
With the assurance of the monthly income, many states hardly look inward for other sources of income. Reports have it that up to 14 states fund at least 90% of their budget with their FAAC allocations. Agriculture, manufacturing and other economic activities that sustained the states before the discovery of oil have been neglected and what some state chief executives virtually do is wait for the month end to go for the allocation, a chunky percentage of which will be embezzled.
The Port Harcourt Federal High Court’s ruling has, therefore, presented an opportunity for the governors to know that they can actually take charge of how VAT is generated in their states and use it to develop their states. It has opened the financial door for all the states in the country to increase business activities in their areas so as to generate more VAT.
Of course, that does not mean that state governments should start breathing down the necks of Small and Medium Enterprises (SMEs) with all manner of taxes. These businesses are already groaning because of multi taxes they are compelled to pay, originating from the state, local government and all that and adding to that may be counterproductive.
There is hardly any state in the federation that is not endowed with abundant untapped resources. It is time the state governors put their personal interests behind and think of how to utilize the human and material resources in their domains for the betterment of their states.
It is, therefore, hoped that other states will file behind River State, putting politics, ethnicity or other biases behind and fight for the restoration of their constitutional rights. They should seek out other provisions of the constitution that need interpretation and ensure that is done so as to deepen our democracy and federalism. The federal government, on the other hand, is expected not only to gloss over these constitutional matters but rather let the states evolve in the interest of all and sundry.

By: Calista Ezeaku 

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Soludo’s Mandate, Austerity Or Prudence?

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The Governor of Anambra State, Prof. Chukwuma Soludo, recently celebrated the anniversary of his two years in office. Prof. Soludo won the Anambra State 2021 guber elections with a remarkable landslide, in one of Nigeria’s most popular and freest elections. A professor of economics and former governor of the Central Bank of Nigeria, who spearheaded banking sector reforms and reconsolidation that became points of reference, Prof Soludo was heralded as the Messiah of Anambra State, especially as he promised to make the State the “Dubai and Japan of Africa.”
But mid-way into his administration, the euphoria about the Soludo magic has long dissipated. The disappointed well-wishers who gathered at the venue of his anniversary at Awka, may have come to get first-hand account of the happenings, and to reassess their stand. Usually such events are opportunities for office holders to recount their accomplishments. Governor Soludo, while narrating a litany of achievements said he runs an austere government in the State to the point of claiming not taking any salaries since assumption of office, and that even the first lady does not have any car allocation from the State.
What stands out however, is that the governor said he had insisted not to borrow, even though records show that the governor has sought and got approval from the State assembly to borrow N100 billion. So far, Soludo’s decision not to draw the loan is commendable, because records show that as at January 2023, the State’s debt deductions stood at N872,425,828.86 per month, which was 27.8 per cent of net statutory allocation, and 12.4 per cent of total allocation. Today, that burden is more than double due to naira devaluation.
Additional kudos goes to Soludo from Anambra’s 2024 budget summary documents, which show that the approved 2023 budget estimate of N260,394,690,434 yielded a revenue of only N155,647,114,526.22, of which the State spent only N76,905,169,399.35 to realise a whopping surplus of N78,741,945,126.87.
However, how austere is Soludo’s administration? And is austerity a measure of development? As sympathetic as the first family’s acclaimed self-denial may sound, the office of the first lady is not a constitutional creation, and therefore has no entitlements. The governor’s basic salary is N185,306.75, while his hardship and constituency allowances are N92,654.37 and N370,617.50, respectively, all of which sum to N648,578.62, a negligible amount compared to the governor’s monthly security vote of N850 million, amounting to over N10 billion per year, plus other perks of office.
Former Governor Obiano is currently facing charges of diverting N4 billion from security votes. Soludo should have told the public if he has cut down such humongous allowances.
Anambra State’s approved 2024 budget of N410,132,225,272.11 also shows that the governor’s office receives N11,199,200,089.19 comprising personnel bills of N4,668,243,574.08 and capital expenditure sum of N6,530,956,515.11, for the State’s Boundary Commission, Anambra State Public Procurement Agency, Anambra State Investment Promotion & Protection Agency,  Anambra State Action Commission on AIDS (ANSACA), Christian Pilgrims Board, Muslim Pilgrims Board, Anambra State Small Business Agency (ASBA), Greater Onitsha Development Agency and the Greater Nnewi Development Agency, whereas these agencies should belong to requisite ministries, while the office of the governor is saddled with developmental concerns.
On the social sector, Soludo’s administration allocates a paltry annual purse of N175,000 for the upkeep of each secondary school in the state, which translates to less than N60,000 per term, and may be the reason some principals got tempted to request fees from students.
The plight of 656 health centre in the state are more pitiable as most receive N140,000 per year, which is about N11,667 per month, may be to fuel generators and other expenditures. The Orumba General Hospital is allocated N105,000.
The  Anambra State should be more realistic in funds allocation to ensure that meager funds do not stifle essential institutions.
Anambra’s 21 local councils that draw a total monthly federal allocation of over N8 billion, continue to be ruled by illegal Transition Committee Chairmen appointed by the governor, thus denying the State of political tutelage at the council levels that groom vibrant politicians to the national level, while Anambra State Independent Electoral Commisson lies idle with allocation of N197,301,110.40.
As for roads construction, the governor may have done well, with the Ekwulobia on-going project standing most prominent, but what is on ground across the State lags far behind expectations. It took him two  years to deliver his flagship campaign promise at Okpoko in Onitsha, combined with a re-election fever, to deliver the Okpunoeze road at Nnewi, probably out of wariness of the Senator Ifeanyi Ubah factor. Governor Soludo almost turned the road commissioning at Nnewi into a campaign ground.
In a country where politicians envision themselves as construction project management officers, road works, however inappropriate, have become the be-all-of- the-average. But for a professor of economics, who had sat at the vintage position of a Central Bank governor, where the impacts of policies and big industries are clearly understood, there are far bigger development expectations for which Soludo’s coming sounded messianic.
While his tax administration reforms are commendable, the brigandage of the Ocha Brigade and ANJET, who enforce tax drives, are eliciting sorrowful tales from the masses, especially road transport drivers. Insecurity remains a terror in the State. Meanwhile, in less than nine months, Alex Otti of Abia State has initiated rapid ‘positive disruptions’ as Soludo likes to coin it, and capped it with Geometric Power’s 24-hour of electricity in Aba, a project worth $800 million. In Imo State, Seplat Energy and Nigeria Gas Infrastructure Company (NGIC) are rounding-up a $700 million ANOH Gas Processing Plant, while Shell/NNPC is completing a $3.5 billion Obiafu-Obrikom-Oben OB3 gas pipeline network, despite insecurity, to link the Escravos-Lagos pipeline system. The revenue that would accrue to Imo State when it comes onstream far outweighs what Anambra gets harassing struggling transporters. Moreso, Shell has just empowered youths from the host communities of Assa, Ochia, Awarra, Obile, Avu, Obissima, Obuomadike, Ununwaku, Ohoba, Obitti and Umuapu, who graduated from its one-year training. Road construction and contracts in Imo would be usual community development accompaniments.
While the rat-race for revenue drives continues in Anambra, the State sits on 50 billion barrels of crude oil reserve, and 10 trillion cubic feet of gas awaiting development, out of its seven gas acreages, only two are being minimally tapped. Vested interests bind State-owned Orient Petroleum Plc with inept partners, First Modular Gas Systems Ltd, in ways that may have repelled big Oil and Gas players like Seplat Energy whose major shareholder, Dr. ABC Orjiako, is from Anambra State, and Mr. Emeka Offor’s Chrome Group, whose Interstate Electric Company Ltd are stakeholders in Enugu Electricity Distribution Company (EEDC) and the Alaoji Power Plant. It is obvious, the State has the human resources to develop its potentials, but needs prudent leadership.
Anambra, home to the Innoson Car Assembly plant, industries and businesses that are suffocating under poor electricity, needs visionary managers that draw down greater benefits, even if they do not forego salaries.

By: Joseph Nwankwo

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Opinion

Nigeria Must Not Become  A Wasteland

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The political, business and economic classes seem to lose sight of the fact that a land without a people is in another word known as a wasteland. And what is a wasteland?
A wasteland is a society uninhabited by a people, and therefore the exploiters, manipulators and abusers of the commonwealth will have nobody and nowhere to ply their trade, whatever that may be. This is a fact that most of them seem to have so missed in their blind rush to rob the common people of everything, including their sanity.
Religious leaders are part of this ruthless group, but we decided not to mention their insidious role in the exploitation of the commoner because we have spoken about them in an earlier article on the subject of corruption. The word ‘corruption’ is not supposed to be spoken in the same breath with the phrase ‘religious leaders’, but what is abnormal elsewhere is very normal in Nigeria, especially when it comes down to the exploitation of the common people.
It is a known fact that despite its abundant resources and potential for extreme wealth, Nigeria is one of the backward nations in which only an insignificant number of people benefit from the commonwealth to their satisfaction and, above all, wish.
This is the way they want it, because theirs is a group, regardless of members’ religion and race, that does not welcome gate crushers, until it is absolutely necessary to do so. And so is mostly done by way of marriages. It is like a secret society,  the secret of which it does not want outsiders to know and share with others outside the clique. It is a clique that non-members are fiercely not allowed to know what goes on in it. Along the way, a non-member may even lose his life with the members’ fierce protection of their exclusive conclave.
As stated earlier, when marriage calls with a ‘commoner’, members try all they can to disallow it, but when that is not achieved, it is reluctantly agreed upon until the ‘common’ party is fully integrated into the conclave. And so, a new member is then reluctantly born into the otherwise exclusive group. And all of the members of the group belong to one religion or the other, with, maybe, some holding firm to the traditional beliefs. Still, they feast on the commonwealth as if it was their own to do as they please.
It would seem that we believe in a different God. Muslims among us believe that our God is a just God, Who does not condone injustice on one over another, and that everyone must account for their actions in what we generally call ‘the hearafter’ before God (SWT). It is my belief that some members of this group do not believe in accounting for what they did while they were on this earth, even though those who believe in Christianity believe that Prophet Isa (AS), (Jesus Christ) ‘died for their sins’. This much is evident in their blind quest to exploit the common person, and they keep ‘acquiring’ from the commonwealth that which they, their children and grandchildren cannot spend in a sensible manner in their lifetime, try as they may.
Yet, the common person celebrates these people as heroes, which gives them the licence to continue their exploitation (of the Common person) of what by the laws of the land belongs to all. Celebrated on these shores, these people steal the Commonwealth blind and bring out a pittance by way of supposed charity or ‘assistance’ to the poor in the name of help. How is it possible to help a person from the proceeds of what you ingeniously or forcefully stole from him? This only happens in the land of the Mafia or in Nigeria, which is controlled by its own mafia. The earlier the Nigerian mafia is done away with, the better for the common person, now in the pole position to utilise, defend and enjoy the Commonwealth, as the laws of the land meant it to be.

By:  Abdu Malumfashi, Abuja.

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Opinion

Nigeria Must Not Become  A Wasteland

Published

on

The political, business and economic classes seem to lose sight of the fact that a land without a people is in another word known as a wasteland. And what is a wasteland?
A wasteland is a society uninhabited by a people, and therefore the exploiters, manipulators and abusers of the commonwealth will have nobody and nowhere to ply their trade, whatever that may be. This is a fact that most of them seem to have so missed in their blind rush to rob the common people of everything, including their sanity.
Religious leaders are part of this ruthless group, but we decided not to mention their insidious role in the exploitation of the commoner because we have spoken about them in an earlier article on the subject of corruption. The word ‘corruption’ is not supposed to be spoken in the same breath with the phrase ‘religious leaders’, but what is abnormal elsewhere is very normal in Nigeria, especially when it comes down to the exploitation of the common people.

**It is a known fact that despite its abundant resources and potential for extreme wealth, Nigeria is one of the backward nations in which only an insignificant number of people benefit from the commonwealth to their satisfaction and, above all, wish.
This is the way they want it, because theirs is a group, regardless of members’ religion and race, that does not welcome gate crushers, until it is absolutely necessary to do so. And so is mostly done by way of marriages. It is like a secret society,  the secret of which it does not want outsiders to know and share with others outside the clique. It is a clique that non members are fiercely not allowed to know what goes on in it. Along the way, a non member may even lose his life with the members’ fierce protection of their exclusive conclave.

As stated earlier, when marriage calls with a ‘commoner’, members try all they can to disallow it, but when that is not achieved, it is reluctantly agreed upon until the ‘common’ party is fully integrated into the conclave. And so, a new member is the reluctantly born into the otherwise exclusive group. And all of the members of the group belong to one religion or the other, with, maybe, some holding firm to the traditional beliefs. Still, they feast on the commonwealth as if it was their own to do as they please.

It would seem that we believe in a different God. Muslims among us believe that our God is a just God, Who does not condone injustice on one over another, and that everyone must account for their actions in what we generally call ‘the hearafter’ before God (SWT). It is my belief that some members of this group do not believe in accounting for what they did while they were on this earth, even though those who believe in Christianity believe that Prophet Isa (AS), (Jesus Christ) ‘died for their sins’. This much is evident in their blind quest to exploit the common person, and they keep ‘acquiring’ from the commonwealth that which they, their children and grandchildren cannot spend in a sensible manner in their lifetime, try as they may.

Yet, the common person celebrate these people as heroes, which gives them the licence to continue their exploitation (of the Common person) of what by the laws of the land belongs to all. Celebrated on these shores, these people steal the Commonwealth blind and bring out a pittance by way of supposed charity or ‘assistance’ to the poor in the name of help. How is it possible to help a person from the proceeds of what you ingeniously or forcefully stole from him? This only happens in the land of the Mafia or in Nigeria, which is controlled by its own mafia. The earlier the Nigerian mafia is done away with, the better for the common person, now in the pole position to utilise, defend and enjoy the Commonwealth, as the laws of the land meant it to be.

Abdu   Malumfashi

Malam Malumfashi writes in from Abuja.

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