Connect with us

Column / Opinion

FG must tread the path of honour, Dan Agbese




Successive federal administrations have collectively earned a well-deserved reputation for their wretched dealing with labour. They serially break agreements reached between them and labour after usually an agonising series of negotiations between both parties to either avert strikes or end them. When the government serially breaks the agreement, labour resorts to the only poison arrow in its quiver: a crippling strike that grounds public and private businesses. When these two elephants agree to disagree, they trample on public rights and freedom with the disruption in social and other services that affect the national economy. This is one sickening habit that dies hard under successive federal administrations. 

This is not to suggest that labour, often given to petulance, is always right in their demands from their employers. An uneasy relationship between employers and employees is cast in stone. No one can change it although both sides desire a harmonious relationship.

            All strikes are avoidable, thanks to the tongues that talk peace and hammer out agreements binding on both parties. The truth, however, is that employers do not usually commit themselves sufficiently to avoiding strikes. The current strike by doctors is evidence of what could be avoided but was not. The federal government unwisely thought it was more expedient to turn its back on the agreement it reached with the NMA in March this year than tread the path of honour by honouring its letter and the spirit. The grievances of the doctors are a recurring decimal, to wit, poor pay, poor, unpaid hazard allowances that are on this side of pittance, poor and intolerable conditions of service, broken down medical and health facilities that put a dent on the professional competence of our doctors, a situation that has made medical tourism to India, Europe and the United States of America, a routine option for those who  do not bother to count their money because they can’t any way. 

            The minister of labour, Dr Chris Ngige, a medical doctor who should know what his colleagues are going through in trying to live up to their Hippocratic oath to serve humanity by saving the sick, appears to be indifferent to their plight. I thought he would use his current exalted position to improve the lot of our doctors and other medical health workers. Perhaps he too is fatigued by the unending problems with labour and the consistent resort to bad faith on the part of the government.

            It should have been possible for the government to avoid this strike action by the doctors. All it needed to do was to respect its own part of the agreement. To allow the doctors to go on strike at this time and paralyse what is left of the parlous state of our health delivery system is the height of insensitivity by a government of the people. The Covid-19 pandemic has refused to bow down to medical attacks against it. It is still ravaging the world with new and dangerous variants. We now face more and more critical challenges in saving our people from the pandemic scourge.

 At the best of times, Nigeria has never had a health delivery system capable of containing even the outbreak of measles. Covid-19 is a more critical challenge than that. It is a challenge no nation can run away from. Doctors, to be sure, are not God but they are trained to prevent diseases from making the grave an early home for the sick. The strike by the doctors compounds the inefficient response to the pandemic by the Nigerian state. 

            It is not unknown to the federal government, the main employers of the doctors in general hospitals and teaching hospitals, that this country is not doing enough to convince anyone that it is paying sufficient attention to the health care of its citizens. Nor is the government unaware of the deplorable state of most of these hospitals. The doctors are not selfish. They want a conducive environment in which to work; they want modern medical equipment with which to work; and they want the Nigerian state to provide them with the basic necessities to enable them do their best in the service of their compatriots. It is not too much to ask of a nation that is mindful of the health of its citizens, as indeed, all governments should be.

            Perhaps, this should give you some idea of how well Nigeria has been coping with meeting the challenges of health care delivery system. On April 27, 2001, African leaders, under the auspices of the African Union, AU, met in Abuja to discuss a common approach to the challenges posed to the continent by malaria, HIV/AIDS, tuberculosis and other diseases that have made the continent home. The agreements reached by them came to be known as the Abuja Declaration. At the meeting, Nigeria pledged to commit 15% of its annual budget to health. It has been 20 years since that pledge was made. And it has been 20 years with the pledge broken resulting in the progressive deterioration of the health care delivery system in the country and the demands for a radical improvement by doctors and other health workers. It is official.

            Partnership for Advocacy in Child and Family Health at Scale, a non-profit organisation, issued a report on the 20 years of the generous pledge by Nigeria and came up with the non-too-surprising report that the annual budgetary allocation to health averaged a paltry 4.7 %. This is nowhere near the 15% pledge. The budgetary allocation reached its peak of 6.2% in 2012. Even in the face of the ravaging Covid-19 pandemic, there was no significant improvement in the annual budgetary allocation to health. In the current federal budget, in the year that should see more and more money being poured into the health sector to give the pandemic a good fight, the budgetary allocation to health was still inexplicably a wretched 4.5%. This is like confronting a man armed with AK-47 with a sling.

            In the health sector, as indeed, it is elsewhere in government, the annual recurrent expenditure vote outstrips capital vote. According to the report, in the 20 years post the pledge under review, recurrent expenditure took a hefty 78% of the annual budgetary allocation, leaving capital vote with only 22%. This is a glaring evidence of a lopsided expenditure that makes it impossible to grow our health care delivery system. You do not need to look closely to see the dilapidation in the general hospitals. Many of them are eyesores of the worst kind. 

            And it leads to this, according to Dr Olanrewaju Tejuoso, former chairman of the senate committee on health: “The country trains great health professionals, but many leave the country due to the lack of health infrastructure that would motivate them to stay and instead search for higher financial returns abroad.” 

Brain drain has been a curse of the nation for a long time. It is not about to be stemmed. We will continue to lose our highly trained professionals to other countries which value them and provide infrastructural facilities for their talents to blossom.

Part of the tragedy in the health sector, according to the report, is that the little that is allocated to the ministry of health is poorly utilized. For instance, “between 2009 and 2019, a total of N576.36 billion was allocated as capital expenditure for the health sector. From this sum, N408.79 billion was released but only N318.65 billion was spent.” This shows you the dilemma in the health sector, a vital sector plagued by all sorts of challenges, including the morbid fact that “20 % of global maternal deaths” occur in our dear country.

When doctors go on strike, they compound these and the other problems. By the time they call off the strike, new challenges would have surfaced in the health sector, again taxing them and their employers. The Nigerian state has no option but to radically commit itself to making health care delivery system a priority. It could begin by redeeming its pledge to commit 15% of its annual budget to the sector and gradually lift the sector from the back burner to the front burner. 

Given its admirable performance in the maternity wards, this country is piling up challenges upon challenges in the health sector. More mouths to feed and more and more babies and their mothers to be taken care of. Medical tourism is not an option; alternative medicine is not an option. The only option is making health care delivery system a priority in our national scale of preferences. We must not lose sight of the fact that, according to Dr Francis Ohanyido, “Nigeria is set to be one of the most populated nations by 2050. The population is what fuels the economy. But a good economy needs healthy people. The economy of Nigeria in the future depends on the health investments we make now.”Someone should whisper that to the president.

Email: [email protected]


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