Connect with us

Column / Opinion

Restructuring, el-Rufai and the rest of us, by Hassan Gimba




There are a number of issues on the public burner. I could have gone on with Part 2 of my write-up on General T.Y. Danjuma and what Nigeria could take out of him. But that should wait. There is also Sambisa Forest, Abubakar Shekau, Boko Haram and the Islamic State of West Africa (ISWAP). And then, of course, the brouhaha about the ban on open grazing in the south. The death of General Attahiru Ibrahim, the Chief of Army Staff, is the freshest.

Sambisa needs to be talked about because it is like the spiritual base of Boko Haram and Abubakar Shekau’s headquarters. It is where our military claimed several times that they had captured. At a time they told us they would turn it into a tourist centre, at another time a stadium and at another time their base.

Sambisa is where the Nigerian military tells us that their jets had bombed Boko Haram’s “Command Centres”, or Boko Haram chiefs at “Planning Conferences”. It has always been these or some plausible “achievements”.

However, mid last week we got the news that the Islamic State of West Africa had invaded Sambisa and, seeing no way out, the overpowered Shekau had taken his life along with those of some ISWAP commanders via suicide bombing, a case of he who lives by the bomb dies by it.

It is an excellent question for one to ask: is it the same Shekau whom our military claimed to have killed again and again, and could not defeat, that some ISWAP fighters took out so easily when they wanted? Then ISWAP must be a deadlier alternative to the erratic Shekau.

The ban on open grazing should be applauded, though. It is high time the north also banned it. I do not want to talk about the death of General Attahiru Ibrahim yet. The wound is too fresh. Suffice it to say that had he been from another part of the country, the “ever-wise” would have concluded that someone from the “other part” of the country killed him.

But sometimes it pays to have a suspicious brain. We must stop accepting things at their face value. What is wrong with our military planes and what caused the ill-fated crash that led to the COAS’ death? We hope the enquiry will be conclusive and the findings not cloaked in official lies and secrecy. 

Anyway, today is about restructuring. According to Wikipedia, restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company to make it more profitable or better organised for its present needs. Similarly, the Cambridge dictionary defined it as the act of organising a company, business, or system freshly to make it operate more effectively.

Restructuring is a term used by corporate bodies and synonymous with a reorganisation, regrouping, realignment, shifting, transformation, etc. It has, however, taken a political meaning in Nigeria.

While some proponents of restructuring see it as a constitution review strategy aimed at bringing government as close as possible to the people at the grassroots, others see it as simply a call for the restoration of federalism. The belief is that Nigeria would function better with fundamental changes in the charter of citizenship rights, on the structure of the military, the police system, the judicial system and even the political system.

However, most of the people who cry “restructuring” do so because it is the vogue and not because they understand it or are ready for it. Many of them think restructuring is akin to the removal of the so-called ‘born-to-rule’ people from being their ‘taskmasters’.

They cannot realize that their governors are not from another world, but elected from among them. They are blind to the fact that all their houses of assembly members, commissioners, local government chairpersons and councillors, members of their state and national legislature and all political appointees and public servants from their areas are their people.

No one from another part sits on their grants. They get their monthly allocations and all other statutory grants just like all other states and local governments of the federation.

Instead of the people calling those directly superintending over them to account for their mis-governance, they mischievously prefer to lampoon imaginary rainbows that “drink up their waters”. Thus they found a bogeyman for ethnic bashing, regional bashing and religious bashing.

Because the people have been led by the nose by pedagogues, their leaders have jumped in front of the bandwagon and are shouting more loudly just so they would remain relevant.

If not that, how can one situate the recent call for restructuring by the southern governors? Do they care for restructuring as they want the herd they want to continue leading by the nose to believe?

They would have since given their houses of assembly, judiciary and local governments the financial autonomy due to them as approved by none other than President Muhammadu Buhari. Nigeria would have been able to save some strikes out of many, at least.

How Right Is el-Rufai?

Malam Nasir el-Rufai, a political gadfly, is a man who elicits extreme emotions. You are either fanatically for him or extremely against him. To each group, he neither acknowledges your admiration nor gives a hoot about your disdain. He does whatever his mind tells him.

Since becoming governor, the small-sized but courageous Kaduna State governor has dismissed no fewer than 30,000,000 workers as the last count. Labour estimates 50,000. His reasons are that his government will now use the salaries they gulp for the good of the other segments of the state’s population. According to him, over 90 percent of the state’s allocation goes to civil servants who are less than a percent of the state’s nine million people. And this he cannot take.

What many people cannot understand is that most states in Nigeria are described as “civil service” states because the only viable industry – the largest employer of labour – is government. Just observe socio-economic activities around the time salaries are paid and you would understand the economics of it all.

When salaries get delayed, even the okada people have no job, markets become empty. The tomato seller, tailor, and retail shops suffer as much. Private schools know so because school fees get delayed, hence teachers’ salaries.

In some advanced countries, governments give allowances to the jobless so that the economy would not grind to a halt, and to ward off a rise in crime. It is, therefore, wrong to dismiss a worker, who probably left home that day promising his family unable to feed that morning that he will return with food, only to return with a sack letter. And he will not even get his entitlements that the state has been deducting from his salaries since his first pay, or his severance benefits. 

A government with vision will have a timeframe within which to train people to be self-dependent before disengaging them from public service. A self-dependent person can even engage other jobless citizens, thus contributing positively to the development of the state.

Dismissing thousands who have nothing to fall back on has serious security implications to the nation. After all, insurgents, separatists, bandits, militants, etc, all target such frustrated class in their recruitment drives.

But come to think of it, has el-Rufai reduced the number of his many aides, many of whom have no schedules? He collects salaries and allowances, yet the Kaduna State government feeds him and caters for his family. Is there no anomaly here? Will it not be wise for him to release the millions budgeted for his upkeep, and all those many allowances he collects? After all, all those he dismissed cater for themselves and their dependents from their meagre salaries. Is it not time we held a conversation about the expensive upkeep of the president, governors and other political office holders and top public servants?


Column / Opinion

2023: The North must let go, by Dan Agbese




The season is virtually upon us. The politicians are sharpening their knives for 2023. The sound is becoming jarringly louder. Prayer warriors are being pressed into service just like the eyes and the ears of the gods. It is always good to seek the assurances and the support of God and the gods in the battle for political power in our country. It is a battle no one takes lightly. 

But the fate of our country in 2023 is not in the hands of God and the gods. It is in the hands of those who play god, to wit, the party moguls whose bounden duty it is to dispense favours to godsons and god-daughters, even at the expense of peace, unity, a sense of belonging and cohesion in our badly fractured republic. It is our duty as fellow citizens not to allow them to be trapped in their faux pas only for us to blame God and the gods at the end of the day. 

This is the time for the rest of us to put our views across on what should be done to set our country back on the path of oneness. Politics, as the wag said, is too serious to be left to politicians. 2023 presents us with some peculiar but critical challenges, not the least of which is that the crass mismanagement of our diversities under the current dispensation has widened our traditional fault lines and opened some other fissures. This is the time to recognise them, appreciate them and factor them into the permutations for the locus of power at the centre in 2023.

The two major political parties, APC and PDP, are beset with internal problems and wrangling. They have fractured national executive committees and both are engaged in patching things up by constituting reconciliation committees to appease their members who feel aggrieved by the endemic problem of our political parties: the absence of internal democracy. The committees will reconcile them and thus help to staunch the toing and froing from one party to another and back again that instantly changes the fortunes of political parties and their members. These movements are merely an opportunistic exploration of accommodation in a rival political with seemingly greener grass under its feet. Its deleterious effect is the inability of the political parties to build themselves into steady and strong parties able to drive, through their policies and programmes, our national development. Weak and unsteady political parties are afflictions on our democracy.

The first order of business for the political parties is the choice of a national chairman in each case. This is no ordinary choice. It is critical to the political parties because everything else rides on the section of the country that produces the national chairman of each party. In their tradition, the section that produces the national chairman cannot produce the party’s presidential candidate – all thing being equal, of course. 

The real question is not who but which section of the country, north and south should produce the next president in 2023. The fortunes or the misfortunes of each party will depend on its answer to the question. Perhaps, we should lend them a helping hand in the absence of a guiding principle through which the locus of power at the centre is determined at the regular election intervals. In 1983, NPN mooted the idea of a rotational presidency between the north and the south. Its purpose was to ensure that politics being a game of numbers, number alone would militate against equity, fairness and justice. Its new formula was to be put to the test in 1987. It never was because after four years, the generals returned from the political Siberia to service their political fortunes. 

This was later renamed power shift. Different semantics, same  primary purpose. It was the rallying cry by the south in Babangida’s transition to civil rule programme; the argument being that the north appeared bent on domiciling the presidency to the permanent disadvantage of the south, given the number of northerners who had held the levers of power since independence. It was no way to build the nation and unite the people. It was time, the south strenuously argued, for power to shift from the north to the south to make the latter an equal partner in the Nigeria project. That would be the right way to build the nation and unite the people.

Quite a bit of water has passed through the River Niger to the creeks. Power shifted to the south in 1999 and 2011. Still, 2023 presents the country with the same unsettled issue and challenges. The late head of state, General Sani Abacha, introduced the geo-political zoning system as the basis for managing our ethno-political and other interests. It is the formula for sharing or allocating elective and appointive political offices at the centre. It has virtually become an important tradition in both the management and mismanagement of our diversities. Can we use this as the basis for inclusive governments in which every part has a chance to both hold and milk the cow?

It still rankles those who, while recognising zoning as necessary in other cases, appear allergic to using it as the basis for choosing a party’s presidential candidate on the grounds that it would be a cynical abbreviation of individual political ambition. I think we are dealing with some sophistry here. Political parties are constitutional creations by tradition and that is why you find neither APC nor PDP in the constitution. By constitutional tradition they are the platforms on which people seek elective political offices. More importantly, political parties determine independent ways and means of managing power and growing  the  national economy without recourse to the national constitution. Each political party has its own constitution by which it runs its affairs. That zoning is not in the constitution does not prevent a political party from using it as a basis for determining the locus of political power at the centre provided it is satisfied that it makes for equity, fairness and justice and does not offend the letter and the spirit of the supreme law of the land. 

It is the constitutional right of a political party to find ways and means of managing the affairs of a nation. That which it chooses to do does not become unconstitutional by reason of its not being in the constitution. Sophistry is a red herring across the path of serious and rational thinking on managing our nation and its myriads of diversities in a manner that makes Nigeria our Nigeria all of the time, not some of the time. 

The south sees the north and its so-called greed for power as the nation’s main problem. In the next few months as the debate on the locus of power at the centre heats up, copious evidence would be provided to show that the north has used its sheer number to dominate power in the country since independence to the discomfiture of the south. This evidence cannot be rationally contested. So long as the south feels marginalised by the north, so long will our country continue to be a patch work of ethno-religious interests masquerading as government of the people; so long as the south feels that it is not an equal partner with the north in the Nigeria project, so long will our country remain an atomistic nation in perpetual conflict with itself; and so long as our political leaders are given to the luxury of paying lip service to equity, justice and fairness sans a commitment to those ideals, so long will the simple formula for building a nation and uniting the people elude us.

Let us quit pretending about this. Buhari’s successor will inherit a fractured republic and a divided people. It behoves our political leaders to appreciate this and take steps now that will de-fracture the republic and unite the people and make our country peaceful. It is time for the north to recognise that it has a moral duty to share and share power equally with the south. Political power is not essentially about merit. It is about what is right for a country at a particular point in time. There are potentially great leaders in every part of the country. To recruit them, we must ventilate the system and end power hoarding.

To move forward, we must take two urgent steps. The first is to accept and formalise power rotation or power shift between the north and the south and cast it in marble. Let us ride on what happened in 2019. APC and PDP zoned the presidency to the north. Two northerners slugged it out. We can do the same in 2023. Power must shift to the south and the two political parties must choose their presidential candidates from there and let them slug it out as to who wears the presidential sash. 

The second step is to accept the zoning arrangement as a means of perfecting the power shift. It is not enough to broadly rotate power between the north and the south; power must also rotate among the zones in the north and the south so that no zone dominates and leaves other zones in the cold.We can emerge from the current crucibles as an enviable republic and a united people. But we must set aside sentiments and face the challenge of nation building with the courage to use political power as an instrument for the good of the nation and its people. I am not naïve enough to believe that this would be easy but I believe we have enough patriotic Nigerians who wish to see our nation pull itself up from the murk of its failed promises, shed its toga of a potentially great country and put on the new toga as a great nation. Then we can to ourselves what President Barack Obama said to his fellow Americans: yes, we can. Yes, we can unite the people and build a great nation.

Email: [email protected]

Continue Reading

Column / Opinion

Campaign for the return of Benin Bronzes and other significant objects taken in colonial era





Benin bronzes are a collection of more than 3,000 figures and other decorative pieces looted by the British in 1897. Today they are housed in over 160 public and private collections around the world. These objects were created from the 13th century onwards by the Bini people and include portrait busts in brass and bronze. Some were made using the sophisticated lost wax method of casting which was once thought to be an exclusively European invention.

The Benin Bronzes or rather Benin objects, because not all of them are made of metal; some are made from ivory or wood, are objects originating from the Kingdom of Benin.

Ill-gotten Gains

On January 2, 1897, James Philips, a British official set out for the coast of Nigeria to visit the Oba of Benin Kingdom. Historical reports have it that he took a handful of colleagues with him, and it is assumed he went to persuade the Oba to put a stop to the interruptions to British trade.

When Philips was told that the Oba would not see him because a sacred festival was taking place, he went anyway. He never made it back. For the Benin Kingdom, the killing of Philips and most of his party had huge repercussions. Within a month, the British sent 1,200 soldiers to take revenge. On February 18, the British Army took Benin in a violent raid. All the valuables found in the king’s palace and surrounding houses were looted. Within a month, much of the bounty was in England. The artifacts were given to museums or sold at auctions or kept by soldiers for their mantel pieces.

Campaign for the return of our objects

Nigeria has been calling for the return of its artifacts for decades. Some pieces stolen in the raid have found their way back to the country. This happened when the British museum sold several plaques to Nigeria in the 1950s when the Lagos museum was being established. Others, it sold in the open market. But these were not free and it is the full-scale return of our objects that is being called for now.

A key moment came in the 1970s when organizers of the major Festival of Black Arts and Culture; FESTAC ’77, asked the British Museum for one prized item: a 16th century ivory mask of an Oba’s mother {now widely known as the FESTAC head}. The organizers wanted to borrow the work to serve as a centerpiece of the 1977 event, but the British Museum said it was too fragile and therefore would not release it. This incident remains fresh more than 40 years later.

Almost since their looting, demands for the return of our artifacts have been made by Nigeria and other African states. Now with the intense interest in colonial loot, the focus has returned to them. Central to this shift in interest was the announcement by the French President, Emmanuel Macron in 2017 in Ouagadougou to return colonial loot from the French colonial museums and to commission a groundbreaking report by Senegalese writer, Felwine Sarr and French art historian, Benedicte Savoy that ultimately supported his decision.

For the last decade, a consortium known as Benin Dialogue Group with cooperation from the National Commission for Museums and Monuments has been working to repatriate some of these Benin bronzes and establish a permanent display in Benin City.

Obstacles to the repatriation

The British Museum holds about 900 objects arguably the largest collection so far and with the support of the government has denied restitution. This lies within a larger debate about taking responsibility for colonialism as a crime against humanity. Furthermore, the British Museum is currently prevented from returning their loot by the British Museum Act of 1963 and National Heritage Act of 1983.

Those in charge of museums, in the early quest for the repatriation of these artifacts, were initially unaware of the problem of colonial loot. When pressure mounted, they downplayed the critique, ridiculed the critics and even defamed them.

Another pressing question by most museums/governments is what happens to the artifacts upon its return to their home country. Frankly however, this should not be their concern. What the rightful owners do with their art is their decision and this should not delay restitution.

There are many objects in private hands and museums. Appealing to such persons to return them might prove difficult because some are just not willing to do so and there are no laws compelling them.

Many western countries have laws ensuring the return of Nazi-looted art, this approach has not been extended to art stolen from Africa and other parts of the world.

Changing attitudes to repatriation by international museums

Germany’s Minister for Culture aptly captures the changing realities for most international museum institutions. ‘‘We face a historic and moral responsibility to shine a light on Germany’s colonial past. We would like to contribute to understanding and reconciliation with the descendants of people who were robbed of their cultural treasures during the colonial era.”

Asmau Hussain-Braimah,
National Museums, Abuja

Continue Reading


The VAT collection impasse; who should call the shots, states or federal government ?





The legal tussle around the collection of Value Added Tax (VAT) in the country takes a new turn, with the latest appeal court’s order in Abuja, asking all parties to maintain status quo and to refrain from taking actions that will give effect to the federal high court order in Rivers state, which seemed to favour the Rivers state government in the ongoing legal dispute over the VAT laws between the Federal Inland Revenue Service (FIRS) and the Rivers state government and, with the latest application by Lagos state government asking to be joined as co-respondent in the civil motion filed by the Federal Inland Revenue Service (FIRS) asking for a stay of execution of the federal high cour’st order which declared that Rivers state government has the right to collect Personal Income Tax and Values Added Tax in the state.

The application which was filed on behalf of Lagos state government by the Attorney General of the state, Moyo Sore Onibanjo (SAN) is asking that the state be joined in the motion filed by FIRS because the interest of the state is at stake in the matter and that it will amount to breach of fair hearing, if the state is not joined as respondent in the proceedings, while the council to the FIRS, Mahmoud Mogaji is urging the court to hear the main application as that is of the utmost priority.

Meanwhile, in the midst of these litigations, the Lagos State governor, Babajide Sanwo Olu on Friday, last week signed the state’s value added tax bill into law after it was passed by the state’s House of Assembly on Thursday.
 According to a statement signed by the Lagos State commissioner for information and strategy, Gbenga Omotosho, the law was signed by the governor to impose and charge duties on certain goods and services within the state and this has now become a law in the state.

As the debate concerning who, between the state and the federal government has the right to collect Personal Income Tax and VAT continues, there is a growing question among Nigerians as to what the latest appeal court’s order for parties to maintain status quo, implies in this case that appears to be a sort of clash of authority between the Federal government and the governments of  some state , as Kogi state governor, Yahaya Bello has declared that the state’s VAT and personal income tax would still be collected by the FIRS.

The questions now being asked in the face of the controversies resulting from the conflicting courts’ orders is the question of where the tax payers should turn with their taxes ? Do individuals or corporations pay their VAT to the states or the FIRS, or do they just hold on to their monies while the cases last in court ?  There is also the question of who benefits and who loses in the current stalemate between the affected states and the federal government ?

While the general arguments in these cases seem to revolve around the issue of fair and equitable distribution of the nation’s resources and fiscal federation, the legal, socio-economic and political implications of the whole matter is worth the attention and consideration of Nigerians so that by the end of all this, we would have had a revenue and tax regime system that will permanently address the issue of equitable and fair sharing of the nation’s resources in the best interest of all nigerians.

In a Channels Television programme, Politics Today, last week, Friday’s edition, the panelists which compromises of legal, economic, tax and constitutional experts all brought in their respective perspective into the discussion in order to provide clarity for many Nigerians who are perhaps still confused as to what all these portends for the tax payers as well as the states.

The Legal Perspective

One of the guests on the programme, Dr Ebun Oluwa Adegboruwa (SAN), when asked by the programme’s anchor, Seun Okinbaloye, what the declaration by the appeal court for parties to “maintain status quo” in this case means, said that in law, when a case of appeal is before the court, the court needs to be allowed to determine the merit of the appeal and that parties should not resort to self-help or take steps that may over-reach the hearing of the appeal, such that even if judgement were to be given, it will become a case of fait acompli, whereby parties may not be able to restore themselves to the position they were before the appeal could be held.  

He said the appeal court’s order cannot be extended to Lagos State as it is not originally a party to the judgement that is under appeal even though, it has asked to be joined as respondent in the suit, it has not been formally joined as a party and that since in any case, the application could be granted or denied, it may be over-reaching to extend the appeal court’s order to Lagos State since it has not been officially joined.

He said status quo in this instance can only apply to parties in the Port Harcourt’s federal high court judgement which is in this instance , the Rivers State government and the FIRS of which the appeal is still pending and that it means, both parties should maintain the position they were before the order was given and that since with the federal high court’s judgement in Port Harcourt, the Rivers state house of Assembly have either correctly or erroneously passed the state’s VAT bill into law, authorising the collection of VAT by the state and, with the Lagos State government signing the same bill into law, it is doubtful if the two pieces of legislations are subject of the pending appeal and therefore, the status quo would be in respect of the subject matter of the federal high court in Port Harcourt.

He called on all sides to seek a common ground as he blames the current APC administration’s failure to restructure the country according to their 2015 campaign manifesto where article one states that it will amend the Constitution to achieve devolution of powers, fiscal federalism as well as state police .

He concluded by stating that the question at hand goes beyond value added tax as it touches on various aspects of our national life and we must start thinking of shedding the weight on federal government by allowing the states and local government to exist and, practicing fiscal federalism in order to stem the problem of over depence of states on the federal government. 

The Economic Implications

On the likely implications of the whole issues on the Nigerian economy in terms of the effects on the investors and their investments, another guest, Dr Muda Yusuf, an economist and a fmr DG, EFCCI, said there is a cause for worry with the latest turn of events because of the uncertainty that has been created as to who should administer the Value Added Tax.

He said to some extent, the appeal court’s pronouncement has provided some clarity on the issue for now, but that he’s more worried of the bigger issue of multiple taxation as this is one of the greatest challenges faced today by investors and that they face this problem in the hands of local government, state and federal agencies and sometimes, even non-state actors such as area boys so, for many investors, apart from paying the statutory taxes to all the federal, state and local government agencies, they still have to pay all forms of registration and renewals fees to various other regulatory bodies hence, the problem of huge burden of taxation for investors and, that if going by interpretations of the pronouncements of the courts, there is the risk of having two VAT laws vis-a-vis the federal government and state government fiscal laws and that this is a matter of concern for the investing communities.

He further spoke of equity particularly from the perspective of the investors because there’s a relationship between amount of tax collected and the volume of economic activities in a particular geographical location and, the amount of what he termed “negative externalities” which he said are the results of the fallouts of economic activities that generated the tax revenue in the first placed and this must be given considerations.

He opined that from the point of view of equity, in any jurisdiction where a particular revenue is being generated, a significant portion of the proceeds should go to the entity in order for it support and maintain the infrastructure and facilities that enable the economic activities to take place in the first place.

He used the case of Ogun state which have the largest concentration of manufacturing firms in the country but never seemed to benefit from  industries company tax , VAT, imports and custom duties generated within the state as all they get is just the PAYE, in a state where less than 30% of the population are income earners.

He further stressed that in regards to equity and fairness to both the investors and the location of their investments, there has to be a strong relationship between the revenue generated within a domain and what it gets back from the tax proceeds because of the negative externalities occasioned by the economic activities in that domain. 

He summed up by arguing for the need to consider the issue of ease of tax administration, wether it is easier for the states or federal government to collect this taxes.

Is Our System Unitary Under The Guise of A Federation ?

The questions of fiscal federation brought to the fore the need for a comparison between federalism as practiced here in Nigeria and federal systems of other climes, and another guest, Mr Yomi Olugbenro, a West African tax leader at the Deloitte said, he considers the whole affairs intriguing as it touches on the very heart of the issue of fiscal federation which has Long generated controversy in the country.

He identified a fundamental principle which he called the principle of certainty because tax payers need to know exactly how much they are expected to pay,at what rate, to which government agency,at what intervals and it has to be convenient fundamentally for the investors.

He said the current situation at best would leave tax payers confused as to which of the courts’ orders should guide the payment of their taxes to the state.Do they go with the Rivers State high court’s judgement that declares VAT null and void, which means Rivers State government can even ask for refund of all that FIRS had been collecting from the state or, do they recourse to the specific VAT law signed by the Rivers State government or, do they just go along with the latest appeal court’s order for all parties to maintain status quo ?

He added that Nigerians need to understand that beyond the euphoria being created by the fact that we are beginning to, by the judicial process, get the states to get parts of the powers that Nigerians have long clamored for, there are certain implications for both the tax payers and the states , in terms of what he referred to as “the convenience principle” and how much this seeming gains affects the ease of tax administration, as well as whether the affected states would still be able to generate adequate tax revenue.

He also said the states need to consider wether this will in the long or short time, lead to increase or decrease in the tax revenue they will generate.

He said but for the tax payers, their are multiple sides to be considered, which include the issue of the general consumer who purchase goods and services that are liable to VAT and that if going by the new Rivers State law, the rate of tax it imposes increases to 7.5% and if we should go by the claims of the FIRS , using the latest appeal court’s interim injunction as basis for it’s legitimate rights to still collect the VAT, the rate of tax imposed is also 7.5% so this he said invariably means that Nigerians will still have to pay 7.5% tax to vendors who then forward same to the various agencies that collect the these taxes.

So there will be confusion according to him , for firms operating in Rivers state as to wether they should pay their taxes to Rivers State  and those operating outside the state, whether they should pay to the FIRS or should they just assume that there is no VAT laws given the contradicting pronouncements of the courts so, he advocated for the expedited hearing and resolution of the pending appeal as tax payers still have up till on the 21st of the month during which they have to file their tax returns , so that there could be clarity and certainty regarding which agency of the government either at the state or federal level is entitled to receive the VAT. 

Which state Will suffer ?

Olugbenro when asked if any state would suffer from the ongoing conflict said that some states will indeed face challenges depending on how they manage the collection system as the current system of collecting taxes centrally by the FIRS is a product of many years of practice and reviews in trying to perfect the the system so it’s never going to be easy for any state to  set up a collection mechanisms that will match what FIRS already have in place again, raising the question of ease of tax administration by states as they’re unable to effectively administer the personal income tax that’s already within their domains for many years.

Another aspect to be considered is when eventually the mechanism for collection of tax is perfected by the states, the quantum or volume of economic activities taking place within the states will determine how much the state will be entitled to collect therefore, he urges states to be cautious about the whole matter as states may no longer be entitled to share in the federation tax revenue, if they take over tax administration in their states and concluded by asking the tax payers to be wary of the current development in terms of the complexity and in complying with VAT laws that spanned the 36 states of the federation including the FCT, particularly for businesses that have spread across the country adding that all these complicates the question of ease of administration.

Should VAT be in the Exclusive List ?

As to the questions of in which of the legislative lists should the of issue of VAT be covered,  Mr Emmanuel Anyaegbulam, a lawyer and executive director, African Center for constitutional studies , said the tax law currently in question emanated from the military era which comes with the problems of law reform and reviews, which is supposed to be carried out every 10 years but that the last review which took place was 24 years ago and it was in 2004, and that the failures to conduct this periodic reveiws is what has now thrown up this present arguments. 
He also spoke of the issue of public revenue within our constitution, which is captured from section 162 of the Constitution.

He said that in a federation, states are not unform and added that the Nigerian federalism is only in name but unitary in practice which has brought the issue of where the power of taxation lies.

He used USA as example where he said that poor states like Arkansas and other states considered to be poor states are limited, in terms of what they can and cannot do, by their state’s resources and economic output and that governors of these states do not earned same salaries as the relatively rich states in US.

He finished his submissions by urging for the critical appraisal of not only the Constitution but also of our laws as regards fiscal federation because many states do not even have the capacity to collect these tax revenues and another issue at stake is whether taxation is within the exclusive list but he said it is not per se neither, was it high lighted but you would see trade within the exclusive list.

all these experts perspectives being brought to bear on this issue, it will be very interesting to see in the coming days or weeks how all these will turn out in terms of the relationship between the state and the federal government with regards to the tax laws

Continue Reading

Recent Posts